How to Choose the Right Inventory and Accounting Software

  • December 8, 2021
  • White Paper

Imagine you’re requesting bids for a new warehouse. When contractors ask about the requirements, you tell them:   

“Not too big (but not too small either). And we need some loading docks.”  

You’d never be so vague about such a huge capital investment. Yet when it comes to selecting a new lumberyard inventory software system, many companies request the equivalent.  

Without clearly explaining business priorities, a lumberyard or millwork shop risks acquiring software that falls short. To make a wise inventory and accounting software investment, a company should discern whether a vendor can deliver the things that matter most. It is possible! 

“The software industry isn’t like the car industry. There aren’t standard functions that come with every platform.”  

 Unlike in the car industry, there aren’t required features standard to every software platform. When businesses are buying software, they assume all the functions in their current platform are “industry standard” and will be included in every other platform. They end up with software that has things they want, but discover it’s missing things they need. Vendors respond to the information you provide and demo the features they think you care most about. If you don’t clearly explain priorities, you’ll only have a partial understanding of what each platform does.   

The Benefits and Limits of Request for Proposals  

Some businesses choose new software by using a formal Request For Proposal (RFP). This means making a list of every required, desired, and nice-to-have feature, assigning points for each answer, and identifying the best software via a score. An RFP answers a messy, complicated problem with a tidy, reassuring grid. 

While the general philosophy behind RFPs is that the right decision will reveal itself, there are limitations.  

Where RFPs Fall Short  

First, RFPs prioritize software features over business needs. Because they are essentially scorecards, RFPs ask questions with simple, yes/no answers (eg. “does the system have X feature”). Open-ended questions aren’t usually included. So deeper discussions such as “how can this system help us cut costs?” aren’t happening.   

Second, more information isn’t necessarily better. The pressure to include every possible criterion means scorecards quickly balloon into hundreds of line items. Processing that volume of information is overwhelming. RFPs risk turning the selection process into a beauty contest. In other words, companies care more about a vendor’s answers than their performance. It’s more advantageous for a vendor to say they can fax forms than to explain they actually have a better solution altogether. 

Lead with Objectives

What’s a business to do? How can you be thorough without missing the forest through the trees? We suggest a simple twist on the RFP: Swap the features list for a list of must-have inventory and accounting business objectives.  

Think about it. Your business objectives drive every other major investment. When you build a new warehouse, open a new location, or add a new product line, you choose to do so because they help increase revenue, improve customer loyalty, grow market-share, etc. It is the same with the business and accounting software selection process.   

To create a business-oriented framework for choosing software, go through the following three questions and write down your answers.   

  1. STRATEGIC OBJECTIVE: What do we need to focus on to be successful over the next 10-15 years?  
  2. BUSINESS STRATEGY: What do we need to prioritize to achieve our strategicobjective?
  3. IMPROVEMENT GOALS: How can we improve our processes to better achieve our strategy?

 Producing the answers may take time and discussion with others in your business.  Here are two examples:


STRATEGIC OBJECTIVE: Improve profitability   

BUSINESS STRATEGY: Identify and repair hidden costs, inefficiency, and waste in our business  


  • Improve accuracy of our financial data with cost allocation, pricing updates, and reporting  
  • Reduce inventory costs by increasing turns and reducing dead stock  
  • Optimize time, equipment, and materials used for custom jobs  
  • Increase employee productivity by automating routine tasks. 


 STRATEGIC OBJECTIVE: Grow market-share   

BUSINESS STRATEGY: Achieve more market share by becoming the most reliable, dependable dealer in our market. 


  • Improve our ability to predict demand so products are always in stock  
  • Increase speed and accuracy during picking, staging, and delivery   
  • Improve our strategies for responding to and resolving backorders   
  • Improve communication and customer experience between branches   


Going through this exercise changes the mindset of everyone in your company. Instead of giving a feature checklist, vendors will talk about your specific business goals and the different ways each platform might help you achieve them. Taking steps to keep your business objectives at the center of the decision means you’ll have better conversations with vendors, more productive demos, and better odds of choosing an ERP system that helps you achieve your goals.  

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