Allocations in Dear Inventory

Allocation Logic in Dear Inventory, explained

Dear Inventory has two order flows, Standard and Advanced. They both let you prioritise stock with soft and hard allocations if you use manual picking. The Advanced module has another option: authorised orders with no allocation at all. In this article, we see the differences between soft and hard allocations, and how to override soft allocations to prioritise which customers get scarce stock.

You can swap a Standard order to Advanced. An order created in the standard process can move to the Advanced process via the Convert button. See the picture below.

Read more: Allocations in Dear Inventory

Per site cost valuations in Dear Inventory

Some tips on getting per-location costing in Dear Inventory for more accurate margins.

Dear Inventory is a cloud-based inventory system which is currently GrowthPath's default recommendation for general purpose cloud ERP systems. 

Dear has a well-thought approach to stock valuation. From the beginning Dear was designed to give users the chance of activate batch and serial number tracking for receipts, and Dear decided to fully support this with FIFO product costing per batch or serial. In fact, Dear users FIFO costing as its costing method for standard stock as well; the common choice is weighted average. FIFO and weighted average are the same over time. 

Like its competitors, such as Unleashed, Trade Gecko and Cin7, Dear allows multiple locations, but it does not keep costs per location. 

Imagine that you are receiving stock into an Australian warehouse and a New Zealand warehouse from a Chinese supplier. You may have the same FOB price, but different landed costs. Dear handles landed costs very well and they are practical to use, so you would like to see different costs at the two different sites. However, if you have a standard product without batch or serial, the FIFO calculation is maintained across all locations: the next item you sell with have the same cost price regardless of the warehouse it is shipped from. Not what we want. 

But if you activate batch costing for this product, you can solve the problem. When you receive goods, you provide a batch number. You can leave it blank, and Dear will create a batch code based on the PO number. If you apply landed costs to the order, they are also tracked against the batch. Because the batches are stored by location, shipments from the NZ warehouse will only involve batches received there. Auto-pick is smart enough to manage that if you don't want to manually choose batches. 

With this approach, costing per warehouse is quite easy, and you will have more meaningful margins. The one thing we can't do with this is keep NZ stock in NZD: if AUD is the base currency of the system, stock with supplier and third party costs in non-AUD is converted to AUD and only AUD. There is no solution.

A note about Dear's landed costs: costing is updated retrospectively, so with Dear, you can receive and ship goods without waiting for supplier and third-party invoices, and still get the benefit of landed costing. 

 

Advanced use of information for SMEs

Applying relevant information to make better decisions is a very important outcome of a medium-term IT plan. Cloud solutions are really good at enabling this, even if the first phase focuses more on the operational foundations. There are many options available for cost-effective business intelligence solutions in the cloud. Amazon, for example, has developed a rich layer which has stimulated many offers: Google for “Amazon Redshift marketplace”.

 

Advanced reporting, or business intelligence, has three components. It has a reporting or data visualisation front end (graphs, dashboards, reports etc). It has a data store and analytical logic layer, which imports data from different sources and allows us to group and relate the data to support the visualisation layer. Business Intelligence products always include these two layers. Many of the cheaper cloud solutions, such as Zoho Reports, effectively stop with these two layers.

 

The third layer is very important. Technically it is know as Extract and Load, (or data transformation). This retrieves the data and processes it ready for import. It would certainly include sales data at the invoice line level, but may include other data such as Google Analytics, Facebook analytics, marketing spend, out-of-stock scores, inventory aging KPIs etc. Extracting that data is some times not simple. Possibly you have sales data coming from different systems (perhaps due to an acquisition): this extract and load layer needs to standardise the data into a common format.


The benefits from this phase really leverages the investment in the cloud-based foundation layer; it taps the potential of cloud-based systems … for a fairly small incremental cost, there is a lot of value.

A hidden gem: Neto/Saasu Integration

A hidden gem: Neto/Saasu Integration

Neto is an excellent hosted online store. It handles wholesale and retail very well (simultaneously), and has the best-on-the-market integration with Australian shippers, anywhere. Better than Unleashed, Dear Inventory, Shopify ...

On top of that, Neto looks after multiple price lists, variations, multiple stock locations,has a decent template engine, a fast backend, good ebay integration. It does backorders like MYOB, which is actually much more suited for smaller wholesalers than the current approach of Dear and Unleashed. A startup from Queensland with Telstra as a significant shareholder. It's not perfect: It doesn't do multi-currency, its reporting is average. And it has no purchasing module. It doesn't do supplier invoices, receipts and costing. For this, is expects you to integrate it with something else. A Neto / Saasu integration offers a lot for the money.

Read more: A hidden gem: Neto/Saasu Integration

Cloud ERP FAQ

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Common questions about cloud ERP

Cloud ERP (Dear Inventory, Unleashed, CIN-7, Trade Gecko, Stitch...) has huge advantages: fast to deploy, easy to learn and with much better reporting and insights that traditional ERP software. Above all, these packages integrate so easily with CRMs, accounting, online stores, third-party fulfilment, shippers. The business model is different: you pay per month, you no longer host the data. Here we quickly cover the main questions, advantages and disadvantages of cloud ERP for SMEs.

We have a much more in-depth review of common cloud ERP solutions here: A review of cloud ERP for Australian SMEs

Read more: Cloud ERP FAQ

IT used by GrowthPath

Here is the IT in use at GrowthPath.

Accounting

Since our foundation, GrowthPath has used cloud accounting. Initially we used MYOB Essentials, then Saasu, and as of 2016 we are on Xero. 

CRM and Project Management

We use Pipedrive. Pipedrive is an excellent CRM for deal-based businesses.

We have become big fans of Trello.

Quotes are prepared with Nifty Quoter.

Email & Cloud Apps, Client OS

We use Google Apps/Google Drive. Desktop OS is a mix: OS X preferred, Chrome OS and Windows get some use. Mobile devices are now mostly Android.

Web services, Analytics

We have servers, and client servers, hosted with AWS and Digital Ocean. We use Ubuntu as the platform of choice. We use namecheap for SSL certificates, and a variety of registrars for domain names. Analytics is 100% Google. 

Content Management

GrowthPath uses Joomla, self-hosted, although we have good Wordpress skills.

Traffic Generation

GrowthPath does not currently use any paid traffic generation techniques. Our SEO is good and organic traffic is sufficient.

 

 

 

Cloud Accounting and ERP Security Risks

Business risks of cloud software

Cloud software has security risks, data-lock-out risks and connectivity risks. These risks can be avoided, and cloud software eliminates other major IT risks. Overall, moving to cloud apps such as Xero probably increases overall security and lowers data risk if sensible policies are in place. Before moving to cloud accounting such as Xero, or to a cloud ERP system, it's worth reviewing these risks.

Read more: Cloud Accounting and ERP Security Risks

Xero and large transaction volumes

Xero Transaction Limits and larger businesses

There are questions about how well Xero performs under "higher loads". Our first concern was for medium-sized wholesalers. Xero talks about limits as low as 1000 'transactions' a month. Our testing shows that Xero performs well at much higher transaction volumes. The first test results are based on 3 years of 2500 transaction rows per month (and then matching payments uploaded via a bank CSV). The second test run was much larger.

Note that after some discussions with Xero and based on our own experience, we (GrowthPath) believe that businesses can interpret the 'limit' of 1000 invoices a month as advisory. This limit does not form part of the terms of service. In Jan 2017 Xero published some small changes to the API limit, and these limits, which are enforced, allow a much, much higher load than Xero's advisory limits. Hence, stress testing is relevant because you will reach the practical limits of Xero before you exceed API limits. Exactly what are those practical limits? That's the point of this article. 

For a medium sized wholesaler, we assume that Xero is the backend to a cloud-based inventory package, such as Unleashed or Trade Gecko, so we did not use Xero's inventory module.

Compared with a B2C (retail) business, a wholesaler has fewer customers, fewer invoices but invoices which have many more lines. Most sales are on credit, so reconciliation of bank feeds is important. 

Testing was carried out in June 2015 with a standard Xero trial account. Browsers used were Firefox and Chrome on a Macbook. Data was imported with CSV files, and some browser automation was done for bank recs and document approvals, using Python & Splinter. We also did some uploads via the API mainly to load Xero for testing.

Read more: Xero and large transaction volumes

Cloud ERP supply chain review for wholesalers, manufacturers & importers

Cloud ERP inventory for wholesalers, manufacturers and importers

Unleashed, Dear and Xero compared and reviewed

GrowthPath now has several wholesale clients which have left MYOB and other legacy systems for cloud-based accounting and supply chain solution (ERP). At this stage (early 2017) we have success with Xero + Unleashed, and Xero + Dear Inventory. At the moment, we recommend Dear Inventory for most clients needing a supply chain solution. We find it clearly superior to Unleashed; the reasons are below. There are three other competitors which are only briefly mentioned here: Cin-7, Trade Gecko and Stitched. Cin-7 is the most interesting of the alternatives.

GrowthPath is now implementing cloud ERP for businesses leaving SQL Server-based mid-tier packages such as SAP Business One, Prism and Attache. Integrated cloud stacks can't match the core accounting power of mid-tier systems such as multiple legal entities, but they have advantages in cost, CRM and online commerce, infrastructure flexibility and ease of use. Many clients see a greater use of features because these systems are simpler to understand and easier to use. New hires get up to speed faster, and existing staff get more information more quickly.

Cloud solutions go beyond traditional ERP, particularly customer engagement. They usually include an online commerce system, such as the excellent Neto, or Shopify, BigCommerce etc. The integration is very good. These front-end systems smoothly accept stock data from the supply chain backend, and exchange order and payment information, usually "out of the box".

The heavy lifting is done by the cloud accounting and supply chain combination (the traditional ERP scope),  commonly Xero + Unleashed, or Xero + Dear Inventory.

Read more: Cloud ERP supply chain review for wholesalers, manufacturers & importers

Making sense of the numbers

It's great to have a well used accounting system quietly gathering thousands of data points about your business. Your bank transactions. Your invoice detail lines. Your purchases. Your stock movements. Your postage and electricity costs. The location of your customers. Their history with you. And so on. 

But how to turn it into profitable insights?

Read more: Making sense of the numbers

Extracting data from MYOB with ODBC SQL

A tutorial about accessing data from MYOB Premier using SQL.This technique opens up much better insights, interactive reporting and feeding data into dashboard tools, as well as making data migration into a new system much easier. You can also automate or partially automate intercompany reconciliations, and detailed cashflow analysis.

Read more: Extracting data from MYOB with ODBC SQL

MYOB: Renovate, Extend or Replace?

Businesses outgrow MYOB. But this doesn't require an immediate replacement.

Read more: MYOB: Renovate, Extend or Replace?

Choosing and implementing a new accounting or ERP system

Advice & recommendations on selecting and implementing a new accounting or ERP system, cloud or otherwise. Including strategies for going live, and when to to live. What are the main steps in the project? What testing is needed? When you should you go live?

Read more: Choosing and implementing a new accounting or ERP system

MYOB crashing and too slow? Don't immediately replace it.

Is MYOB crashing? Too slow? It may be time to upgrade, but first there are some fixes worth trying which can reduce crashes & lock-outs, and improve MYOB speed and performance. 

Read more: MYOB crashing and too slow? Don't immediately replace it.