Is Your Business Software Earning its Keep?
Is Your Business Software Earning its Keep?
Most companies today have automated business information systems to help them manage their business. The systems can keep track of cash on hand, who owes the company money and how late they are in paying up. I t also keeps up with vendors and the balances owed to them and how old those invoices are. All for the very important job of tracking cash flow. This is called tracking liquidity and is vital to the survival of any organization. Yet, it is not enough to ony track cash, as it only is a SHORT TERM measure of success.
If a business's information sytem is only used to track cash, your information system is not earning its keep. There are many other jobs that need to be tracked by your business software. These other activities are measures of profitability. The LONG TERM viability of the business is measered by that number.
What items that you sell are your most profitable?
Who is your most profitable customer?
Which customers are you losing money on?
How many complaints did you have last month, year and how does that compare to prior periods?
Which salesperson(s) should be rewarded for their sales activity?
How are your vendors at keeping their promises to deliver your products on time?
Is your purchasing agent getting the best prices?
Am I notified as soon as invoices over a certain critical amount are past due?
Do we take our discounts from our vendors or are we paying more than we need to?
Are we using bar codes to help us reduce errors and speed up processing of receipt of goods and shipments to customers?
Has our company opened a website that allows our customers to order stock and track its fulfillment on the world wide web?
The list could go on and on, but the point I am making is that tracking cash, while important, is not the only job your information system needs to do. In fact, by having your business system earn its keep, you will eventually have more cash! Friendly has helped many of its allies to increase their net profit, by identifying areas where processes can be improved. We want our allies to have success in SHORT TERM liquidity AND LONG TERM profitability.
Your software ally should be able to help you to do the same. Give them a call and ask them to help you. You should get much more back than the fees you pay them for their advice.