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Accounting for Your Business: Tips for The Wholesale Industry

accounting_wholesale_industry

Many accounting software packages currently available do not cover the needs of wholesalers. There are many standard software packages for retail and manufacturing, but wholesale business requires deeper functionality in certain key areas of business. So how do you find the right accounting software for your wholesale business? Start by taking a look at your overall needs, then survey the market. Research some options, ask for some advice, and try them out.

 

Wholesale Business Needs

The four main business areas that every Enterprise Resource Planning (ERP) software for wholesalers and distributors should provide are:

  1. Distribution process management
  2. Supply chain management
  3. E-commerce
  4. Back-office operations

The ERP for wholesalers and distributors should also provide: business platform capabilities, location-specific functionalities, and use an integrated selection of different software packages.

Here are some tips for each area of your wholesale business. Wholesale business is complex. Cover all your bases.

 

Distribution Process Management

Keeping a handle on your distribution involves covering all bases; from Distribution Requirement Planning (DRP) through Sales and Purchasing. Don’t forget to monitor your quality and above all to take care of your customers with an effective CRM system. If you haven’t already got software for these take a look at some options for CRM first. Remember your customer always comes first.

 

Supply Chain Management

SCM functionalities should be deeper for wholesale than most standard ERP packages offer. You can think of expanding your wholesale business by offering drop shipping to your customers.
Drop shipping is an SCM method in which the retailer does not keep goods in stock but instead transfers customer orders and shipment details to you, the wholesaler. You then ship the goods directly to their customer. For a wholesale-only business drop shipping can be a good strategy for finding new customers through existing channels. Shopify is a great example of a business that successfully uses drop shipping.

 

E-commerce

If your wholesale business is not partly or fully online yet, make the transition. Global B2B giants that started off as SMEs, like Alibaba have pioneered online wholesaling. Going online will help your business by:

  1. Web-based multichannel commerce provides electronic shopping experience for business-to-business (B2B) SMEs. It provides the opportunity to search, compare, and purchase goods online.
  2. Retail and Point-of-Sale (POS) software records, tracks, and analyses data and transactions at retail locations. The benefits to your wholesale business are many; scale up as you grow, powerful analytics, use on any digital device and lower costs.

 

Back office operations

Centred in your back-office operations, accounting for wholesale may require different systems for management and running a business. Three areas are key for your wholesale company to run their back-end operations:

 

  1. Financial applications manage the financial resources of the organisation. These include accounting and financial reporting, budgeting, collection of accounts receivables, and risk management. Make your business more profitable by issuing a pro forma invoice. Make life easier for importers by providing them with full information about your products. Similar to a price quotation, a pro forma invoice gives a preliminary bill of sale sent to buyers in advance of a shipment or delivery.

 

  1. Contract, rebate, and chargeback processing are listed separately because of their importance to the wholesale and distribution companies. Wholesalers and distributors often need to manage complex contracting situations for complex networks of buyers and sellers. The contract management functionality will also need to be closely linked to the rebate and chargeback processing requirements.

 

  1. Human Resources manages the basic people functionalities: personnel management, benefits management, payroll management, employee self-service, health and safety. If your SME doesn’t have an HR department then why not make the move to automated payroll and save yourself time and stress, get strategic.

 

Covering all bases for a complex wholesale business means that you will need to find a selection of software packages and integrate them. Then you and your staff will have to learn how to use them effectively. There are some great options out there. Go and take a look.

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2 Comments

  1. Stella says:

    Great you highlighted wholesale industry I agree retail industry has more advantages regarding tech solutions and they are leveraging these retail and Point Of Sale software more abundantly.

  2. Lori says:

    Where you sell the products will depend greatly on the product and also on the pricing you have. If you deal directly with the manufacturer you can probably get great the best pricing available to anyone and sell to any channel you want including other large distributors.

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