5 Unexpected Costs Holding You Back
It’s the little things that count. Problems that seem small can have a big, negative impact on the bottom line. The following five issues can stunt growth, eat profitability, and even drive away customers.
- Dead inventory Items have been sitting in the warehouse for months or years, tying up space and capital. You aren’t making money on them, and they prevent you from stocking more profitable products. Worse, there’s not an easy way to tell which items are dead, so you can’t make an organized plan to clear them out.
- Slow orders Inventory isn’t available when it’s needed because buyers can’t predict stocking needs or customer demands. Orders get delayed while you wait for product to come in. When your business gets a reputation for slow turnaround and missed deadlines, customers start to go elsewhere.
- Pricing errors Market costs for some items change from week to week. Your ERP system reflects average cost, but average cost isn’t the best way to set prices. You can’t tell if a sales order is profitable until it’s too late.
- Losing bids Without reliable inventory data, reps can’t give competitive quotes. They aren’t sure of market costs and don’t know which items on a bid can be reduced. They may quote high to cover their bases and lose the contract. The bids they manage to win have weak margins, and you aren’t making any money.
- Accounting delays The back office is swamped because basic processes take too much time. Employees stay after hours to catch up on invoices, credit approvals, and closing month end. The delays are clogging up your revenue stream, and the staff is getting burned out from too many late nights.
While these may seem like small issues, they become major liabilities over time. A strong ERP system resolves these problems by eliminating uncertainty and inefficiency. Features like automated processing, suggested purchasing, dynamic costing, real-time data, and executive reporting take the guesswork out of running an operation.
If your current software leaves you with more questions than answers, it’s time to reconsider your business software.