Implement
Inventory
Like a Pro
Attending this Breakout session for
the full 100 minutes entitles you to
2 hours of CPE.
Please be sure you check in to the session using the mobile app or, if you cannot use the app, sign one of the sign-in sheets in the back of the classroom.
Thank you!
MARIO NOWOGRODZKI, CPA/CITP
Principal, Mendelson Consulting
• Master of Acctg Info Systems • Original ISP Advisory Council
• Adv. Cert QB, POS & ES ProAdvisor • Intuit Trainer/Writer Network
• Industry awards:
- Sleeter Group Top Technologist
- VAR Stars, Technology Pacesetter, Killer VAR - Intuitive Accountant Top 100 ProAdvisor - Insightful Accountant Top 10 ProAdvisor
- Insightful Accountant Top Integrations ProAdvisor
Learning Objectives
Working with clients that use inventory raises specific challenges that you need to understand and know how to resolve
• Understand different types of businesses that use inventory
• How to select the best add-on products for different client situations • Specific challenges you can face:
• Landed cost — what is it and how does it affect your client? • Stocking products in multiple units of measure
• Pricing strategies that allow your client to sell in multiple markets • True lot number tracking
Businesses That Use Inventory
• Retail
• Web store
• Wholesale / Distribution • Assembly Manufacturing
Typical Inventory Needs
• Multi-location tracking • Bar coding
• Serial Number tracking • Lot Number tracking
Complex Inventory Needs
• Accumulated costs, WIP • Landed or added costs • Web store integration • EDI
• Scheduling / Forecasting (MRP)
Selecting the Right Add-On Product
• Understand business needs • Good track record
• “Know the company”
• If you are an inventory specialist
Specific Challenges
• Landed costs
• Stocking products in multiple Units of Measure
• Pricing strategies that allow to sell in multiple markets
• Tracking lot numbers through manufacturing and tracing customers that received them
Specific Challenge: Landed Costs
• What are Landed Costs and why are they important?
• Fully landed cost is the total cost of a
landed shipment including purchase price and added costs – freight, insurance,
Specific Challenge: Landed Costs
• Often these charges are received days or weeks after the product has been received into stock (and perhaps even sold!)
• Many companies expense the freight, customs, shipping, and other charges because it is too difficult and time consuming to allocate these charges to product costs
Required Purchase PO
Client is a computer store importing printers for resale. Sales Price Mark Up Price Price
Canon PIXMA MG3620 Inkjet Printer $ 69.00 25% $ 55.20 $ 52.00 HP Envy 4502 Inkjet e-All-in-One Printer $ 59.00 25% $ 47.20 $ 45.00 Epson Expression Home Xp-420 Inkjet Printer $ 71.42 25% $ 57.14 $ 55.00 Client orders a container that has 100 of each printer (300 total)
Added costs associated with that container:
Trans-oceanic shipping $1,500.00 Customs $ 800.00 Insurance $ 750.00 Freight to the warehouse $ 550.00 $3,600.00 Added cost per printer (300 printers) $ 12.00
PO Added cost Landed Actual
What is the landed cost and actual margin Price per printer Cost Mark Up
Specific Challenge: Landed Costs
Specific Challenge: Landed Costs
• Receive freight bill for $450 from Jones
Specific Challenge: Landed Costs
Specific Challenge: Landed Costs
Specific Challenge: Landed Costs
• Allocate the freight charges based on the
Specific Challenge: Landed Costs
• Allocate the freight charges based on the
Specific Challenge: Landed Costs
Specific Challenge: Units of Measure
Many times, inventory needs to be sold in more than one “Unit of Measure” • Generally, stock in the smallest
Unit of Measure sold or used in manufacturing (each, piece, etc.) • Add alternate Units of Measure
Specific Challenge: Pricing Levels
When inventory is sold to multiple markets, pricing products can be a challenge: • Need multiple price levels
• Need multiple pricing tiers within a price level
Specific Challenge: Setting List Prices
Inventory clients need to establish a list price. This could be a specific amount or related to cost (average cost, last cost, etc.)
• Pricing for price tiers could be a specific price or based on the list price or the
Specific Challenge: Pricing
• Continuing the pricing discussion, we just set up pricing for the product to be sold by “each” to 3 different levels of customers
• To sell by the dozen, box, case, etc., we would set up a table similar to the one we did for “each”
• All of the above prices are in US $; if selling in another currency, similar tables would be set up
Specific Challenge: Customer-Specific Pricing
• Even with all the work you may have done, your clients will have customers who have specific pricing needs. You would generally
assign a default price level (e.g. “Dealer”) so most of their pricing is dealer pricing.
Specific Challenge: Lot Numbers
Lot Number challenges:
• Not all products need a lot number or a serial number
• Positive control of the lot from
receipt through manufacturing to the finished good at the customer’s
location
Specific Challenge: Lot Numbers
Positive control of the lot from
For inventory businesses, one of his biggest fears is being “out of stock” • Being out of stock means lost sales
and unhappy customers
• Over stocking means too much $$ sunk into inventory
Specific Challenge: Reorder when stock is low
Inventory software needs a way to maintain stocking levels without
over-investing in inventory. Different software will do things differently. Acctivate tracks available inventory and minimum stocking level.
Specific Challenge: Reorder when stock is low
All products where available stock is below the minimum stocking level are displayed in an Inventory Alert screen
• User identifies the products they want to order • Acctivate suggests:
• a preferred vendor
• a quantity to buy (minimum order amount)
Specific Challenge: Reorder when stock is low
All products where available stock is below the minimum stocking level are displayed in an Inventory Alert screen. The client identifies the
products to be ordered. Acctivate suggests a preferred vendor, a
Specific Challenge: Change in manufacturing BOM
• In some product manufacturing, the process is static – there is never a change in the BOM
• In some industries (food, pharmaceuticals, fluids, etc.), the process is not static – often need to vary:
• Components in the BOM
Specific Challenge: Change in manufacturing BOM
Specific Challenge: Change in manufacturing BOM
Specific Challenge: Change in manufacturing BOM
While a work order was being processed, there were several deviations from the expected norm:
• 160 Lbs. of tomatoes were used instead of 150 Lbs.
• There was not enough of one lot number to create the assembly so two different lot numbers had to be used
• There were not enough white onions so yellow onions were substituted
• 10 Lbs of white onions • 12 Lbs of yellow onions
• 28 Oz. of garlic was used instead of 30 Oz.
Specific Challenges of Clients with Inventory
• Wholesale / distribution and manufacturing clients have special challenges that need to be addressed
• Consultants that work with inventory clients have a number of opportunities for larger billable engagements:
• Setup and implementation • Initial training
Thank You for Attending!
Intuit has recommended these apps that may
be of interest to you.
Each of the apps below relate to the subject matter covered in this course. Intuit encourages you to learn more about these apps when visiting the Exhibit Hall.
Help?
[email protected] www.mendelsonconsulting.com 954.447.0250
We sincerely appreciate your
taking time to complete your
session evaluation.
Our goal is to provide you with the very best training possible and your feedback can help us achieve that goal.
Thank you!
Thank you for attending!
#SNH16 [email protected]