There are two sides to every story, but only one truth. When sharing financial stories at a business, it’s important to find the real truth behind your facts and figures. Knowing your true costs and labor productivity will give you a better idea on what your true profitability is for the products and services you offer customers. This information is important for positioning your business for growth.
Businesses using disparate, specialty software programs are most likely to have several sides to the story. Data stored in silos are usually specific to that one area of your business, such as inventory or labor productivity. Drawing on these separate sets of data and trying to combine them into a single report is challenging and fraught with the risk. Using an integrated solution, such as NetSuite®, offers a single, centralized repository for all of your business data. When data is entered and used from a single enterprise resource planning (ERP) solution, you are more likely to get a single, and more accurate, story for your facts and figures.
NetSuite is a comprehensive ERP solution that offers the ability to manage all of the data from all of the specific areas of your business, including inventory, supply chain, manufacturing, fulfillment, projects, billing, payroll, and other core operations. Instead of separating data in silos, you integrate your data so you can see how one area influences another area. For example, monitoring which suppliers you order inventory from, as well as the quantities and time frame needed for delivery, will give you reliable figures for inventory costs. Determining how much the inventory is handled, from receipt through manufacturing activities, offers insight into labor productivity for the manufacturing or handling of that product. Regularly tracking this data can provide insight into the profitability of that product, as well as the activities that can impact that profitability. For example, rising energy costs, shipping costs, or material costs can increase the cost for your inventory, thereby shrinking your profit margin.
Using ERP solutions, such as NetSuite, to monitor inventory, manufacturing activities, labor, and financials will make it easier to get to the truth behind the prices you set for your products and services. A single software solution will eliminate many of the educated guesses surrounding common business expenses and what you think your products may be worth. Contact Kraft Enterprise Systems, LLC, for more information about NetSuite and getting to the truth behind your profit margins.
By Glenn Saunders, Director of Client Success for Kraft Enterprise Systems, LLC, Tennessee Project Accounting Solution Provider