Cost of goods sold consumes over 40% of every dollar your customers spend in your store. There is no other single expense that provides the same opportunity to improve profitability as cost of goods. The inventory you maintain and how you use it to fulfill your customers’ orders directly determines how profitable your business is. If you spend 3% more than the appropriate amount on product, it is like reducing your price by 3%. Managing your yield, waste and spoilage, and shrinkage (theft) all require disciplined inventory management. Without managing inventory and ultimately your cost of goods, then you have no insight into why your cost of goods is what it is and have no idea what type of actions you need to take to make your business more profitable.
Managing inventory looks like a daunting task. However, by utilizing tools that automate much of the effort, it is much easier to fully understand your purchase and consumption of inventory. eP2’s processes and systems take much of the burden off of you, allowing you to spend your time operating your business and still have the information necessary to optimize your profitability.
What’s in it for me?
There is an optimum COGS for every business. Businesses would love to get to 100% working inventory at the lowest possible cost. To achieve this, a business must know how it is using inventory. What are the optimum levels of each inventory item? What are the optimum ordering qualities of inventory items? Am I getting the best price and terms for the inventory items I stock? What is the correct formula of inventory usage and are operations adhering to these formulas. Is inventory walking out the back door? Do I strictly adhere to first-In-first-out usage for perishables? Are my suppliers delivering what they bill me?
This can be a time consuming process especially if all you have time for is recording keeping. If all you have time for is record keeping, then you are adding expense without the corresponding cost saving benefit of using the information to improve your operations. Ideally you would like to spend your time finding the answers to the questions above, not collecting useless information. The paradox is that without the record keeping, no analysis can take place. Many small businesses slowly get away from inventory management because they experience the cost without the savings.
Reducing cost of goods by only 3% of revenue will realize savings of over $15,000 for an average store. Managing your inventory can achieve this savings. It could be worse. You could be spending hours of time trying to manage inventory and have no time to take action to save the money you are finding.

Deferred Revenue is revenue that is considered a liability until it becomes relevant to the business at hand. There are many forms of deferred revenue: gift certificates, software license, prepaid professional services and possibly some retainers when the service delivery schedule is not pre-determined.

Cash is an asset.  Period.  It is never a liability; never an expense; never anything but an asset.  Cash is a current asset, and serves to increase the net worth of whoever is in possession of the cash. Deferred revenue provides cash, but it also establishes a liability because it represents a future event. All deferred revenue will become revenue at some point. You will have to pay sales tax, income tax and possibly royalties eventually.

If your deferred revenue has an expiration date, it becomes revenue on that date. If your deferred revenue does not have an expiration date you will need to develop a procedure for expiring unused services.  Anything sold but not redeemed must become revenue at some point. The IRS will not allow you to carry deferred revenue on the book indefinitely. If you don’t have a procedure to recognize this unused revenue they will give you one. Their procedure will accelerate revenue recognition faster than you may want.

How can a business owner use deferred revenue to help their business? It comes down to cash management. During slow periods cash becomes a problem. Selling products or services in a slow period that will be redeemed at a later date is a way of evening out your cash flow. You might have to provide an additional incentive to buy now and collect later, but the discount might be worth the value to you of accelerating cash flow.

In these hard economic times, when banks are not as forthcoming as they have been, it might be wise to find a way to “float a loan” from your customers. Careful accounting is important. You don’t want to sell what you can’t deliver. Understanding the future consideration of your deferred revenue is critical to long term success. Using gift certificates or pre-paid services might be a way of getting over that financial hump in the middle of your down cycle.

Roam is an innovative meeting, dining, and gathering place for a new progressive workforce. They are dedicated to people on the move that need a better way to connect with others, work productively and grow their businesses. As they expand their operations they need a consistent and accurate view of business performance across all locations. Roam looked to eProcess Pros to provide uniform accounting, business intelligence and customer relationship management in one easy to use portal available from anywhere there is internet access.

Three Firehouse Subs® locations, founded by firemen and renowned for hearty, oversized portions and piping hot subs, are now looking to eProcess Pros for all of their transactional accounting and financial reporting. eProcess Pros completes daily sales posting, three way invoice matching for accounts payable processing, cash reconciliation and monthly reporting.

eProcess Pros is different from most accounting and financial reporting outsourcing companies in that we try to help you in your business, not just record historic events about your business. Because of this we are just as interested in helping our clients grow revenue as we are recording and controlling expense.

We are in an era when driving sales is becoming more and more competitive. Not just from traditional competitors, but from the entire ecosystem of products and solutions targeted toward your prospect profile. Now more than ever progressive Best-in-Class companies are looking for innovative ways to be more effective in sales. They are looking for ways for their sales organizations to rise above the noise of the marketplace.  A fully integrated customer relationship management system tied to well conceived inside sale organization is one of the best tools to achieve this.

No technology enabler is more frequently cited by the Best-in-Class as email-integrated CRM

The Aberdeen Group in conjunction with Salesgenie.com, Front Range solutions, Vanilla Soft, Jesubi, Live Person and Customer Solutions Group completed a study analyzing best practices for inside sales.  Some findings are:

Competitive Advantage comes from:

1. Collaboration between marketing and sales to agree on lead definitions
2. Provide Inside sales with access to prospects/customers business intelligence data.
3. Support an e-mail integrated Customer Relationship Management systems.

Required Actions:

1. Pay attention to the organizational structures around inside sales by ensuring that their mission is supported by process, technologies and direct links to goals of the entire organization.
2. Amplify the conversation between inside sales professionals and their audience, with a rich flow of pre-call information that benefits the seller, and real time, market-facing applications relevant, customized, both for the buyer and the seller.
3. Mine inside sales for best practices that can be optimized by other sellers such as field sales and channel partners.

Some of the more important aspects of reaching Best-in-Class are:

1. Provide more consistency for prospects/customers interactions with your company
2. Focus “Closers” on closing not prospecting
3. Automate the capture and processing of customer data
4. Reduce response times to increase contact and qualification rates

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Chief financial officers (CFOs) should implement finance and accounting business process outsourcing (BPO) to allow them to spend more time on strategic activities, according to Gartner Consulting, a unit of Gartner, Inc.

Gartner Consulting recommends that CFOs consider delegating transactional tasks to a third party whose core business is finance and accounting BPO.

“Outsourcing some of the finance and accounting processes that are focused on tasks such as accounts payables, expense management, and payroll, frees up the CFO’s time,” said Michael Montonen, vice president for Gartner Consulting’s Strategic Sourcing Practice. “The CFO can then focus more on activities such as planning, activity-based costing, process metrics and decision support at the CEO and business unit leadership levels.” [...]

A study completed by the Aberdeen Group investigated the impact of good business intelligence on company performance during this economic downturn. There were three classifications; best-in-class, which has an 11% increase in operating profit and a 96% customer retention rate, Industry average performers which had a 5% decrease in operating profit and an 88% customer retention rate, and Laggards which had a 14% decrease in operating profit and only a 67% customer retention rate. The critical measurement that the Aberdeen Group was evaluating was employee access to business intelligence. Best-in-Class had access to BI for 56% of their workforce, Industry Average had only 36% and Laggards were less than18%. [...]