3 Ways an ERP System Increases Wholesale Distributors Cash Flow
Integrated business management solutions like SAP Business One let you monitor your business in real-time. This is critical when you’re looking for ways to increase cash flow. After all, increasing sales isn’t the only way to increase the assets that you have available.
In addition to monitoring your accounts payable and receivable, managers and executives who are using SAP Business One within their organizations are able to:
1. Evaluate supplier relationships
When you know more about the costs of working with various suppliers, the terms of your purchasing agreements, surcharges and minimums, you’ll be in a better position to negotiate. Whether you opt to work with a supplier who offers better terms, or request a better arrangement with current suppliers, having all the right data available at your fingertips allows you to identify ways to cut costs.
2. Reduce excess overhead costs
When you store product prior to shipping, it increases your overhead. You may be able to avoid some of this by changing the date you receive product from suppliers. But managing that manually can be cumbersome. With a system that automatically monitors stock levels and movement, you’ll have the inventory you need, when you need it. And you can reduce the amount of money you have tied up in obsolete or excess stock with optimized reorder quantities.
3. Minimize expedited orders
Every time you get an order for an item that’s not in stock, you have to make a choice. You can either wait for your next scheduled order to arrive, and risk your customer buying from a competitor in the meantime. Or, you can put in an emergency order and pay extra to get the product right away. Companies that use an advanced inventory planning system often see a 12–22% reduction in stock outs. This means fewer expedited order fees, which will keep your margins in check and improve your cash flow.
Pursuing opportunities to save—especially when you are able to predict the impact of your options and avoid making decisions that will harm your business—allows managers and executives to take control.
With SAP Business One, you will have the ability to monitor your company’s spending habits across the board. As a result, you can easily identify areas of improvement, streamline processes across your company and see the impact in your cash flow.