Supply chain management is a critical function for any small business. Yet, too often companies rely on spreadsheets to manage supply chain activities—a risky prospect that’s labor-intensive and error-prone. A better option is to bring these activities into your financial management or ERP system. Centralizing tasks such as order filling, inventory management and delivery tracking can positively impact sales, improve cash flow and keep you compliant.

Here are five ways that ERP supply chain management benefits your bottom line:

1. Right-Sized Inventory
Getting inventory right can be tricky: too low, you risk losing customers; too high and you’re left holding the bag so to speak. Monitoring and managing inventory in your ERP helps minimize holding costs while still meeting customer demands. Centralized vendor data makes it easy to find a back-up supplier, compare costs and negotiate pricing.

2. Control Quality
Dealing with defective materials or products can be a drain on your business. Not only can it hurt sales, but it can also damage your reputation. Supply chain management software can help you evaluation and document the quality of your suppliers and supply chain partners including approved supplier lists (ASL) and product anomalies.

3. Optimize Shipping
Web sales have made fast, affordable shipping a must-do for all businesses. Keeping track of goods coming and going can become burdensome, not to mention the hassle of dealing with lost or late shipments. The right ERP integration can help determine optimal shipping options—both from a customer service and cost perspective.

4. Improve Cash Flow
Invoicing practices can greatly impact your cash flow. Moving from a manual process to automation allows you to process invoices faster and shorten the order-to-cash cycle. In fact, data shows that, with automation, most companies can reduce day sales outstanding (DSO) by 3 to 8 days, freeing up substantial working capital.

5. Be Compliance
Navigating complex and ever-changing trade and tax rules can be daunting. Being part of a supply chain compounds that risk. ERPs are excellent tools for assessing risk in your business such as rules and regulations around buying or supplying to foreign vendors. Sales tax automation ensures proper invoicing, collection and remittance of sales and use tax and makes it easier to validate and account for resale or tax-exempt products and services.

Most supply chains experience at least one disruption annually, yet businesses don’t have plans in place to mitigate these risks. Don’t let a break in the chain spell disaster for your business. Ditch the spreadsheets in favor of robust tools that strengthen both your supplier and customer relationships.

Learn more about streamlining sales tax compliance and exemption certificate management by reading the whitepaper, “Sales Tax & The Supply Chain.”

by BCG Systems

January 12, 2015 by BCG Systems, Inc.

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Tags: Accounting Software For Supply Chain Management, Distribution ERP Systems, Dynamics GP
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