Inventory and stock management is the heartbeat of every business. Especially businesses who are players in the retail sector, need to diligently manage their stock position for the entire company as well as stock-in-hand at each location. While there are several inventory reports which give you a detailed summary of the stock, Godown Summary is one such report which drills down to display the available stock at each location where your business operates and helps you take crucial inventory-related decisions seamlessly.

4 Key Benefits of a Godown Summary Report

1. Access to stock-in-hand at different locations

Companies use the Godown Summary report to track inventory within factory premises at various manufacturing stages or workstations. The statement provides current stock position for any godown or location at any time. The benefit of having enough stock-in-hand is to meet the demand of your customers. With this report, business owners can seamlessly decide on how to use the stock accurately. Since the statement will give you the location details, you can decide how and where to use the stock without spending any extra amount in the transportation from one location to another.

2. Compare Stock Balances

Efficient stock control allows you to have the right amount of stock in the right place at the right time. It ensures that capital is not tied up unnecessarily, and protects production if problems arise with the supply chain. Godown Summary report gives you a thorough comparison between the stock balances or stock item quantities, rate and value with other godown(s)/location(s) for the different periods which lets you clearly draw comparisons between the stock available in different godowns. This report will also enable you to assess the slow- and fast-moving stocks over a period of time which is helpful for crucial decision making at an inventory level.

3. Stock Visibility

With the help of a Godown Summary report, you can non-transacted stock to alternate units to third-party stock which is in the warehouse. There could be numerous reasons why you might have sent stock to a third-party vendor and vice versa. The Godown Summary report will help you get a consolidated view of the stock whether physical/non-physical, which will further reduce working capital and increase profitability.

4. Customer Satisfaction

When you get a consolidated report of where your stock is physically, you can easily decide on the customers when the demand increases. Instead of informing your customer about the unavailability of the stock, you can advise him to approach the nearest warehouse as per his suitability where the stock is available. You can also take important decisions like how much time and money would you require to invest in order to deliver the stock to your consumer. Basis this, you can even communicate the timeline to your consumer which results in increased customer satisfaction as you can deliver the desired product as per the promised time.

As per Tally’s interpretation, the word Godown it is not limited to physical godown. Companies may use it to track inventory within factory premises at various manufacturing stages or workstations. Further, it is also required to track inventory of raw material and semi-finished and finished product under Job work activity either in case of material transferred on job work basis or for job work undertaken by the company. There is functionality in Tally’s godown master to mark it as own stock of company or third-party stock (i.e. material received for Job work and final product produced out of it by the company). As per accounting principles, such inventory of third party shall not be mixed up with companies own inventory. Tally.ERP 9‘s robust feature takes care in efficiently managing such inventory through the Godown Summary report. Find this feature interesting? Take a Free Trial right here and see how this particular report will help in your everyday business activities.

Stocks play the role of a heartbeat in a business setup. Accurate tracking and movement of stocks help define the profitability structure which further aids in assessing the future growth of a company. One such critical report to help you make better inventory decision is Stock Query Report. A stock query report helps you get detailed information about the stock. Not only will this give you an idea about your future investments in various stock items but also aid in making crucial business decisions. Here are some of the most interesting and insightful benefits you can reap out of stock query reports:

Benefits of Stock Query Report

· Identifying Top Buyers and Sellers

For any business owner, one of the most important things is to establish a thorough understanding of your loyal and topmost buyers and sellers. This will not only impact your business’ profitability but also help you make informed decisions about your stock. The buyer-seller relationship always needs to be maintained well, because effective management of this, defines the dynamics of buyer-seller evolution. Stock query report allows you to display the top buyers and sellers for an item, based on value or quantity. This will ultimately help provide a level of stability and encourage long term commitment from different parties towards achieving results.

· Stock Availability in the Warehouse

Often there are some items which are in high demand and it gets difficult to keep a track on them. However, with a stock query report, you can easily view the stock item available in the warehouse, to make a sale. The advantage about the stock query report is that you can easily view the number of items available in the warehouse at the invoicing level, so that you can give a clear and timely response to the customer at the time of billing.

· Alternate Stock Items

At times, during a particular sale, you find out that the item being enquired for by the customer isn’t readily available. In such scenarios, a good businessman wouldn’t want to lose out on the customer by informing him about the unavailability of the product. But with a stock query report, you can easily view and draw attention towards the alternate choices that the customer could opt for. This will not only help you retain the customer but also help you avoid any kind of monetary loses due to the unavailability of the product.

· Information About Last Sales

Isn’t it common to get confused between the pricing when you have multiple products to deal with? A stock query report will help you get the historical details of the price which will help you make more informed decisions at the point of sale without making you incur any losses.

Since all the necessary information related to stock item is readily available at a single click at the invoicing stage, stock query report in Tally, helps you save precious time. By giving your customer clear-cut information about the product in demand, you can maintain a healthy relationship with them. Stock Query report will also help you make informed decisions as you will have access to crucial information about various stock items in a blink of an eye.

Quite appealing, isn’t it? To get a thorough view of your stocks, take a free trial today, right here!

Understanding Debtor Management

Debtors make an important position in the structure of current assets of your firm. Your debtors would earn credibility based on their credit score and payment performance which is evaluated based on the payments to your firm they have taken credit from. Trade debtors represent amounts owed to the firm as a result of credit sale of goods or services in the ordinary course of business. The key function of credit management is to optimise the sales at the minimum possible cost of credit.

Each firm has its own credit management policy based on which it decides to provide a timeframe for debtors to pay their dues. The formulation of debt management policy seeks to achieve a balance between extending sales and the likelihood of these sales being profitable and collectable. It is quite possible that the receivable turnover is low, and the payment performance is high, indicating that the customers cleared their outstanding, but took a long time doing it. That’s when an accounting software would aid in assessing both the receivable turnover in days and the customer’s actual payment performance.

Benefits of tracking the payment performance of debtors

Identify Customers Sticking To Deadlines

A payment performance report will help you understand and identify the customers who make stick to the deadlines given to them by you. This not only helps them maintain a good credit score but also enable you as a business owner to have a steady cash flow. Prompt collection of debtors’ accounts will also help you maintain a healthy cash flow. Proper management of your debtors will help you get paid faster and prevent bad debts

Identify and Draw Attention Towards Late Payers

Since a payment performance report will give you a full view of the perpetual debtors who refrain from clearing dues as per the timeline provided by you, there are several effective ways in which you can communicate the same to them. As soon as you identify that payments from a particular customer are slow, ensure that you react quickly so that your business doesn’t take a hit in any way. Some of the ways to deal with slow performing debtors include, selling goods at a cash discount if they pay on time, offering them with extra benefits and functionalities (in terms of services) if they adhere to the timeline, etc.

Defining Credit Policy for Debt Control

It is believed that credit policy stimulates sales as it helps in retaining existing customers with a good credit score, and winning clients from competitors. The policy of credit management clarifies the objectives of the company and set best practices that must be followed by the entire organization. Defining of “standard” model for stakeholders and customers will help you smoothen the process of debt collection and mitigating any risks which could affect your company’s financial status.

With Tally, you get a consolidated report of performance of actual payments and the payment history of the customer to assess how long he takes to pay the outstanding balance. Not only will you get to know the actual history for each payment that was made by the customer, but also when the invoice was paid, how long it was due and what was the delay in payment. To know in detail about this crucial feature in Tally, click here! You can also try it out for free here, and see how tracking of payment performance of debtors could impact your business in a huge way.

In our previous blog, we had discussed about 5 things you need to keep in mind, while deciding when is the right time to automate your business. In case, you have decided to automate your business, you would obviously be eager to understand how to go about it. But before you get into automating your business, we would request you to take a step back, and think about – what to automate – in other words, which are the business processes worth automating.

Broadly speaking, any business, irrespective of segment or size, have primarily 6 business processes:

• Purchase Cycle & Sales Cycle
• Operating Expenses Management
• Receivables and Payables Management
• Cash Flow and Funds Flow
• Inventory Management
• Periodic Statutory Compliance

In our next few blogs, we will try to take up each of these topics and understand, how it will help you if you automate each of these processes. But before we do that, lets quickly go through each of these 6 business processes, to understand how each of them are linked to your business growth.

Things to Automate – 6 business processes to focus on

Purchase Cycle & Sales Cycle

The Purchase Cycle is the process of how you obtain and manage goods and services for your business. In case you are a manufacturer, it will be about procuring raw materials needed for manufacturing a product; in case you are a trader, it will be about obtaining goods for trade; in case you are a service provider, it will be about obtaining materials required to provide a service. It starts from placing a purchase order with your supplier and ends with you making the payment for the same, after the order is fulfilled.

On the other hand, the Sales cycle is the financial life blood for your organization. It basically determines how quickly an invoice or an order from a customer is translated into cash in your bank. In addition, it also determines the experience, perception and value add of the goods or service you are offering to your customer.

Operating Expenses

There are several expenses, you must be managing, while carrying out the day to day activities of your business. All these activities are not directly related with your core business activity, say – manufacturing, trading or services – but are crucial to keep your business running, and thus are classified as operating expenses. Popular examples of operating expenses include payroll, sales commissions, employee benefits, conveyance, amortization, depreciation, rent, repairs etc.

Receivables and Payables Management

Keeping track of your business outstandings, is extremely critical, as it impacts your cash flows. On one hand are your receivables – wherein you are expected to extend credits to your customers to maintain good business relationships; on the other hand, are your payables – wherein you are expected to pay up in time, in order to maintain your credit worthiness. Both receivables and payables need to be managed intelligently so that you are never in any kind of cash crunch.

Cash & Fund Flow Management

Two quick measures of your business performance are – cash flow & fund flow. Cash Flow is the difference in the amount of cash available at the beginning of a period (basically, your opening balance) and the amount of cash at the end of that period (your closing balance). In case your closing balance is higher than your opening balance, you are said to have a positive cash flow, and if it is the opposite, you are said to have a negative cash flow.

Funds Flow, on the other hand is a much broader view of your business, as it seeks to analyse the reasons for changes in your financial position. It deals with increase or decrease in your current assets or current liabilities. In other words, your funds flow statement tallies the funds generated from various sources with various uses to which they are put – which in turn impacts your working capital.

Inventory Management

In case your business deals with inventory, you will surely be concerned about maintaining an optimum amount of stock at all points in time – and that’s where inventory management steps in. The objective of inventory management is to provide uninterrupted production, sales, and / or customer service levels, at the minimum cost possible. This is something, which needs to be closely tracked, as a lack of inventory can lead to lost sales for you, whereas an excess of inventory and increase your costs unnecessarily.

Periodic Statutory Compliance

Last but not the least, complying with GST and other statutory norms is imperative for businesses in India. As you may have surely sensed in the last one and a half years of GST, staying compliant requires valuable work time, resources and continuous monitoring to avoid penalties.

Now that we have spent some time on the 6 main processes of your business, you must be able to see how intricately each of them are linked to your business growth. In fact, there is an opportunity for you to become efficient in each of these business processes – and over our next few blogs, we will try to suggest you some ways in which you can seek the help of technology to unlock further growth for your business.

The world of business today, is abuzz with a plethora of hot topics – Big Data, Cloud, AI, IoT, Block Chain, Social media, Digital – to name a few. As the world is slowly turning towards digitising processes, one of the key things which has grabbed a lot of attention, is business automation.

What is Business Automation?

In simple terms, business automation is a way in which organisations take out the most complex and / or the most redundant steps from their day-to-day processes and streamline them for simplicity. It is basically an opportunity for you as a business to apply innovation and make your most critical business processes systematic, such that your business becomes more efficient, and your life become simpler. If you are looking for a yet simpler definition, automation can be viewed as that magical move – which cuts down costs, saves your time, prevents errors from happening and allows your human workforce to solve more intelligent problems, rather than spend time on routine, repetitive tasks.

Now, that we have tried to define automation from various angles, let’s ask some basic questions:

• Is there any business in the world which would not like to cut costs?
• Is there any business which would not like to save time, or avoid errors?
• Is there any business in the world which would not like to have a simpler way of carrying out a complicated task?

Of course, everyone would love to.

But then, if that was the case, all businesses in the world, big or small, would have been automated since inception. A glance at the India MSME industry will easily reveal, that there is still a large chunk of businesses out there whose business processes are still driven manually. An important point to note here, is that automation does not necessarily mean owning a computer – there are sufficient instances of businesses having a computer, but then still using only some basic functionalities to handle one part of their business operations – be it sales, or purchases, or receivables and payables or inventory or banking – but not using it to integrate the entire business as one entity.

What holds businesses back from automating?

So, what holds them back? What could potentially stop a business in India today to automate its operations, when clearly the advantages are many?

Broadly, the reasons can be either or both of the following:

• The automation required will require too much time, and the time spent on implementing automation, is much more than the time saved if automation happens
• The automation required will require too much cost, and the cost spent on implementing automation, is much more than the cost reduced if automation happens OR the cost spent on implementing automation, is much more than the profits I stand to make if automation happens

In short, if you chose to base your decision on only time and money, then you can arrive quickly at an answer. If automation is quick and economical, you will adapt it nevertheless of your size. If automation is time consuming and costly, you will need to get into calculations, check whether it is worth it, and then take a call. And which is why, a valid question for all businesses to ask is – when is the right time to automate my business.

5 things to consider for Business Automation

For you to take a more informed decision regarding business automation, we have listed down 5 factors, which we are calling as the A,B,C,D & E of business automation.

Let’s see what these factors are:

• Accountability – When you automate, you create an owner for each step of your business processes. All tasks are then bound to one or the other individual who is responsible for that task alone. Enabling that level of information transparency helps you to drive accountability across all stakeholders of your business. It also allows you to identify certain trends – which tasks are taking the longest, where do things get stuck most often etc.
• Better Usage of Time – Automating your business helps you to identify redundant, unnecessary steps and processes and remove them. It allows you to identify those points where there is a wastage of time and resources. Not just that, repetitive tasks like compiling and re-compiling information, which do not require human skill or expertise can be weeded out and replaced with automated systems. When you begin to automate your processes it becomes very clear how much time people in your business spend, running around in circles – just because they don’t have the information they need, when they need it. By doing that, you will actually free up time for yourself and your resources, so that they can focus on strategic aspects related directly to your company’s core business. In other words, refocusing their time towards those activities, where technology cannot replace them.
• Communication – An automated approach, allows for a more organised communication between your stakeholders and employees. So, the person handling sales, will be in sync with the person in inventory so that commitments are not made without the requisite stock being present; the person in charge of inventory will be in sync with the person handling purchases, so that sufficient inventory levels are maintained at all times, and so on and so forth. What this will allow you to do in the long run, is develop an improved responsiveness to the ecosystem around you. You will be able to respond to your suppliers and customers faster, thus boosting your competitiveness and leading to better management of your cash and funds flow.
• Decision Making – Making any business decision, without considering all available information is more often than not a clear path to failure. Automating your business processes, will provide you with valuable information, which you will not be able to extract if you performed all the tasks manually or on disparate systems. Not only does it save time for you, but also allows you to analyse the data quicker and better. The higher the quality of data available, the better decisions you make, the more money and time you save.
• Error Correction & Tracking – One of the many virtues of business process automation is, that you substitute human vulnerabilities with the accuracy of a machine. Late payments, slow sales approvals, incorrect tax returns and payments for goods never received are all very expensive errors, which can have an impact on the working capital of your business. More than the error itself, what tends to become more challenging is finding and correcting the error in future. Automation is thus a brilliant opportunity to avoid spending a lot of money, which could otherwise go down the drain, because of some error.

Now, that you have gone through the 5 factors listed above, ask yourself – Are these factors currently a challenge for me? Are these factors important to me and my business, at this point?

If the answer is “No”, you may still want to wait for some more time, for your business to grow further in terms of size, revenue, customers, before pressing the button for business automation. But if the answer is “Yes”, now is probably the right time to automate your business, than anytime else.