Does cash flow freely throughout your drinks distribution business or is it regularly quarantined or tied up in assets that can’t be touched?
Cash flow is a perennial problem for all businesses, but drinks distribution has a handful of specific challenges that need to be solved by industry-specific beverage software.
1. Cash Flow Problem: Unpaid invoices
What’s the solution?: Automating processes
Why & how: It’s not uncommon for payment due dates to slide due to lapses in communications and human error. If you’re committed to improving the cash flow of your business, it’s time to put the use of Excel spreadsheets for financial reporting to bed.
No doubt, there are dozens of business processes occurring simultaneously across various branches of your drinks distribution business. Automatic integration of financial data with other parts of your business (e.g. sales, stock handling) should be a standard feature of your ERP. Your beverage distribution software should be able to flag up overdue accounts; additionally, automatic invoicing and reminders safeguard against slips. Granting access to invoices and delivery records via a customer portal allows customers to keep a check on their account details, increasing the propensity or likelihood that they will settle bills on time.
Does your ERP allow the automatic integration of financial data with other parts of your business such as sales and stock handling?
2. Cash Flow Problem: Stock held up in bonded warehousing
What’s the solution?: Intelligent stock picking
Why & how: Common warehouse management issues include:
- Low stock (leading to unfulfilled orders)
- Carrying too much stock (leading to cash flow problems and increased warehousing costs)
Drinks distribution businesses also have to circumnavigate the problem of bonded warehousing. However, if the ERP system is intelligent enough to pick from stock from the non-bonded warehouse where duty has already been settled, the company will not have to pay to move additional stock out of the bonded area – therefore improving cash flow.
Can your drinks ERP select stock the non-bonded area first?
3. Cash flow problem: Unfulfilled orders
What’s the solution?: Late purchase order reports
Why & how: If orders aren’t leaving your warehouse due to partial fulfilment, invoices can’t be issued, and incoming cash is stymied. This means that only a percentage of the orders are solvent.
When drinks distributors don\’t have full visibility of their inventory and stock selection, decision-making suffers. If your sales team are trying to sell something without stock, they should be corrected either by checking due dates, or ordering in from another depot or location. Reducing incidences of partial or unfulfilled orders means business, and billing, can carry on as usual.
Stock picking from different locations can lead to fewer partially fulfilled orders
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4. Cash Flow Problem: Returnable product
What’s the solution?: Market-specific data structures and processing
Why & How: Another thing specific to the drinks industry is returnable product, e.g. plastic crates and bottles that form part of the distribution inventory. Whenever a wholesaler sells a plastic crate of beer they charge a deposit on that distribution inventory, and only when it has been returned can the account be credited. Many ERP systems cannot account for these market-specific idiosyncrasies, which is why it is important to choose a system with the data structures and processing in place to easily handle this, ensuring you don’t lose out on reclaiming your cash.
Not every ERP can lend itself to hassle-free returnable product processing
5. Cash Flow Problem: Over budget ERP implementation projectWhat’s the solution?: ERP built for drinks market vertical
Why & How: IT projects that run over budget have the potential to seriously restrict cash flow into and around your business. The project budget plan can be jeopardised by unforeseen expenses, complications, and delays in implementation. One way of ensuring your project doesn\’t get sidetracked is choosing an ERP designed for your market vertical. This reduces the amount of expensive customisation and add-ons needed for optimal performance within your drinks business. Also, since your software partner knows your industry inside out, they will be able to make recommendations in terms of maximising profits, implementing better processes, and outputting the best reports that inform your place in the market. These instant reports can also show snapshots of your business at this time as well as fluctuations of the cash flow on a daily, weekly, quarterly, or annual timeline.
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