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When it comes to American inventory management, there's a startling amount of lost opportunity. And all too often, those missed chances equate to lost profits. Hopefully your own inventory management team is on the ball, running the warehouse at a level above average. But better than just hope, you can find specific areas for improvement and work with your team to enhance your company.

Capterra Blogs writer Andrew Marder has gathered information on ten of the most troubling aspects of modern inventory management. These statistics paint a picture of U.S. businesses not appreciating how much benefit could accrue from high quality warehouse tools and processes.

1. The equivalent of 7% of the national GDP is tied up in business inventories, accounts receivable, and accounts payable - approximately $1.1 trillion in cash.

2. Inventory as a percentage of sales is on the rise from its 2011 low. U.S. retailers are carrying an average $1.43 in inventory for every $1 in sales.

3. Nearly half of American companies don't have a robust inventory management system in place. 46% of SMBs use a manual method or simply don’t track inventory.

4. Companies are holding on to more stuff, in spite of increasingly efficient shipping and manufacturing networks. A measurement of the amount of inventory on hand, based on average sales per day – called Days Inventory Outstanding – rose more than 8% from 2009 to 2014.

5. Enabling some of these inefficiencies, we see that warehouse space is much cheaper than other building types: an average cost per square foot of $5.08.

6. In a 2013 survey looking ahead to this year and next, Motorola found that 54% of businesses planned to increase the number of inventory SKUs they stock.

7. Retailers are shifting the balance of inventory more toward stores, as seen even in 2015 with 15% of Target’s online purchases marked for pick up in-store.

8. To take advantage of mobile devices for increased speed and operational efficiency, 67% of warehouses plan to increase use of these devices for managing inventory.

9. Improved inventory tracking has benefits beyond dollar savings. Measured in 2010, barcodes on medication reduced errors at an academic medical center by 41.4%.

10. Inventory and warehouse management is growing in relevance. The Bureau of Labor Statistics shows that from 2008 to 2015 the number of warehouses in the U.S. rose 9%.

 

Technologies such as barcodes and RFID tags are examples of how inventory management can be enhanced. Two other high-ROI approaches are to create custom applications for your specific warehousing needs and to integrate your inventory system with your accounting, CRM, and ERP software. aACE is a highly recommended solution that brings the benefits of FileMaker development and robust integration to work for you.

Running your own business can be both exciting and nerve-wracking. However one of your least glamorous responsibilities is being an informal representative for the state treasury. Collecting sales tax for the states where you do business isn't something that most entrepreneurs look forward to or prepare for. Luckily, there are specialists who can help you make sure this aspect of your business is also successful.

Avalara has years of experience working on taxation details with small and mid-sized businesses. Last year Avalara Director of Government Affairs Scott Peterson identified five of the most common problems a company faces when trying to start things off right. Use this advice to make sure your sales tax registrations are in order. Then you can focus on the challenges that are more interesting and rewarding.

Pitfall #1: Not registering in the right states - This is an obvious problem, but the solution may not be as clear. To avoid penalties, fines, and audits, you have to know what the right states are. To identify those states, you have to understand nexus - the relationships that require you to collect sales tax. The easiest nexus to identify is where your business offices are located, but several other factors can trigger this obligation. For more details on this key factor, Avalara has provided a number of articles, videos, and whitepapers.

Pitfall #2: Registering in the wrong states - A philosophy of 'better safe than sorry' may not be the best method for sales tax registrations. Each registration costs money and requires you to spend time reporting, even if you haven't collected any sales tax for that state. Clearly those resources would be better invested in more profitable activities.

Pitfall #3: Assumptions about Streamlined Sales Tax (SST) - State governments have realized that it's in their best interest to help businesses collect sales tax. At the start of the new millennium, the SST was organized to simplify registration, reporting, and expenses. Currently there are 24 states fully participating in the SST. If you do business in most of these states, taking advantage of the program can be very helpful. However, if you only have nexus in a few of these states, the benefits for registering this way may not outweigh the costs.

Pitfall #4: Using incorrect NAICS codes - When you register, you specify your company type using codes from the North American Industry Classification System. For example, there are different codes for light manufacturing, wholesale distributors, and professional services companies. The code you select is vital because updates about tax requirements are distributed according to this classification. If you have an incorrect code, you might miss updates that state governments will hold you accountable for.

Pitfall #5: Not de-registering properly - While registering has been streamlined, the process for de-registering when you no longer have nexus is more intricate. Most states have a formal process for notifying the proper departments that you are no longer obligated to collect sales tax. And some states have time constraints on how long you must continue reporting after you cancel your registration.

 

To assist with these various challenges — plus the complexities of calculating, collecting, filing, and remitting sales tax — Avalara offers powerful and affordable sales tax automation software. Leveraging these tools can free up additional resources for your core business activity.

Even greater time and money savings are possible when you integrate sales tax software with your accounting, ERP, and CRM tools. One of the most powerful combinations is to team up Avalara's AvaTax with aACE 5 business operations software. aACE 5 is built on FileMaker so it can deploy both on-premises and in the cloud to run on Mac and PC devices. It helps manage transactions, inventory, and customer interactions. And it's built to integrate with quality tools like AvaTax in order to maximize your business velocity.

"We have been using aACE for 8+ years and going with their advanced integrated software was our best decision ever." - Claire Wade, Manager, Skip Gambert & Associates

How nice would it be to have a generous marketing budget so you can explore technology tools without worry? Most small and mid-sized businesses don't have that luxury though. Instead smaller companies have to be very careful and very smart about what tools to invest in and when. Marketing automation tools are no exception.

To help you decide if the time is right for your company to get the advantages that come with automation, let's walk through some factors that Larry Alton shared on CIO.com last year.

Defining Terms

You know what marketing is, but might not realize what parts of a marketing process can be automated. The basic, most economical automation tools focus on simple, repetitive tasks, such as responding immediately to emails or publishing social media posts according to a schedule. The functionality grows from there as more complex, more expensive packages provide more sophisticated operations. Lead scoring and segmentation, A/B testing, product databases and coupon codes, social media monitoring — all these tasks can be programmed for automation. And ongoing research in machine learning might add more to this list.

Potential Drawbacks of Automation

The most apparent difficulties from automation hinge on becoming dependent on the tool. When it is so easy to send out emails to a client segment, you might be tempted to overuse the feature, annoying customers instead of enticing them. Likewise, the tone and feel of your customer interactions might gradually shift to a robotic, less engaged mode. These are examples of how an easy tool can affect your work. Just like relying on a hammer makes more and more challenges look like nails, with simple email and social media outreach, it may seem like every campaign is merely a reason to schedule another automated messaging crossfire.

Besides the mindsets that can crop up in your marketing team, the paradigms of the marketing tool vendor might also be troublesome. Their pricing can be an obvious hurdle; however, a more dangerous obstacle might be their attitude about processes. Often the big-name CRM vendors will offer an excellent toolset — as long as you change your workflow to match theirs. For some companies this might not be a problem, but when your team is already working well, it's worthwhile to shop around for a marketing automation suite that can adapt to support you.

You probably noticed that these difficulties might better be described as "dangers of not being mindful with your tools." Any power tool can have side effects if the person using it isn't careful. And marketing automation is definitely a power tool, as the benefits show:

Rewards of Leveraging Automation

When you invest in a CRM package or other marketing automation resource, you can look forward to some important advantages:

Leveling the Playing Field — Your dollars will obtain the same benefits that larger competitors obtain from their marketing tools. A small company might not be able to field as many salespeople, but your CRM software can give you just as much insight into the right people for your sales staff to contact. You can reach out to them the same way a national enterprise would, tracking their interactions as well.

Reduced Human Resource Demands — Automation's biggest selling point is how it enables fewer staff to achieve larger results. This might translate into savings, where a certain job role can be handled by the software, allowing you to convert that position into something else the company needs. Or the benefit might come by way of profits, where the software helps your staff be more efficient and effective in converting leads into clients.

Education and Ideation — Deploying new tools often brings you into contact with new people and new ideas. Whether it's the software vendor directly or the active community of developers as with FileMaker products, you have a chance to benefit from their experience at no additional charge. Along the same lines, as you learn the strategy behind the software design you may be able to extract insights for improving your business processes.

Scalability — Because a marketing automation suite operates primarily in a digital framework, a high quality system can easily grow with your company. Computerized customer management can track 5000 contacts as easily as 50. Each year as your business increases, the software will continue to provide helpful insights for your team and regular contact for your customers.

 

The bottom line isn't a surprise. As with any business investment, an entrepreneur needs to be smart. Marketing automation can be very useful to balance out competitive weaknesses. However, it shouldn't become a crutch. No software should eclipse the ingenuity, warmth, and competence that your skilled staff can provide. With creativity in niche targeting and locally-focused optimization, you should never feel stuck and never settle for a glossy package that doesn't provide what you need.

Ideally your CRM tool will do more than just manage customer relationships. For example, when it is integrated with ERP software, your business velocity increases that much more — insights from the warehouse can be routed to the client, rather than waiting for this email or that conference call. Likewise, when your accounting system communicates directly with the marketing tools, you can instantly know how budgets are progressing and what additional resources you have to invest. aACE 5 provides a fully integrated business software suite, with all the acumen and agility that entails:

"In addition to implementing aACE and using it for the past five years, aACE has helped us grow our business, allowing us to quickly change our business processes as our customer base has changed, thus increasing our ability to get solutions to the marketplace quickly and efficiently." — Bryan Anderson, All Solutions 360 LLC

For businesses looking to improve their operations, there's currently a lot of focus on collaboration applications and services. But even the best digital collaboration tools might not actually be the best tool for you.

The Wall Street Journal has published and re-posted Jay Greene's article about the diminishing returns of collaboration tools. Titled online, "Beware Collaboration-Tool Overload," Greene's report asks some valuable questions about software designed for sharing. From startups to tech giants, there are a host of apps that support chat sites, video conferencing, and cooperative document editing.

What about the end-users? Greene notes that the research shows workers often find it hard to get on board for new tools. If the app doesn't offer a distinct benefit for what they are trying to accomplish, then it's just one more chore to take care of. Savvy workplace managers are quick to observe and respond to this paradigm. They have moved to simplify the toolsets, so likewise, the tool providers are adapting.

Greene takes an example from the J. Walter Thompson advertising agency. The company provided a plethora of tools in effort to maximize efficiency. However, the employees quickly recognized that not everyone in the company was using every single tool provided. But the entire team was using email. This relative reliability meant that email became the de facto collaboration tool. And this quickly turned into email overload. The agency's decision was to prune back the diversified toolset. By focusing personnel's attention on a single useful app, they were able to move forward.

Craig Le Clair, an analyst with Forrester Research Inc., is another source that Greene quotes in his insightful write-up. Le Clair highlights how each new tool requires switching to a new window and new interface conventions. Each new tool requires new login credentials. Each new tool might be intended for specialized purposes, but even that becomes more mental overhead which the end-user must manage.

For smaller companies, is this lesson relevant? You might be able to get better results than any collaboration software or email by simply walking across the room to a colleague.

But while dynamic collaboration on documents might not be a priority, there are still ways that a simplified toolset can bring your business excellent returns on efficiency. A unified business suite for your accounting, ERP, and CRM tasks can eliminate the headaches from spreadsheet proliferation and poor software integration. It's even better when that business suite runs smoothly on the PCs in the office and the iPads in the warehouse.

aACE 5 is a cross-platform business operations solution that helps you take the WSJ's lesson about simplified software right into the heart of your company. From quote-to-cash, aACE can streamline your workflows, maximize your efficiencies, and accelerate your business velocity.

"Any SME who wants tight control, instant up-to-date information over all aspects of their business without the need to plough through acres of data, and optimal automation of all sales and functions, irrespective of Mac or Windows platforms. In short, I have no hesitation in fully recommending aACE as a truly great enterprise solution. We are truly proud to be part of the aACE family." — Peter Osborne, CEO, Special EFX Ltd.

You know that technology is vital for the success of your growing company. Each savvy business owner recognizes that fact. But we're not all well-versed in the details of hardware, software, firmware, middleware, or the other -wares out there.

It's essential to have a good IT staff. And for a little extra support, Kate Smith of SecurElement Infrastructure Solutions has written about some common problems. The five guidelines she suggests can help you lead your small or mid-sized business to a solid technology strategy.

Price Shopping

No one will deny that your budget is a central factor for making decisions (jokes about Congress aside). However, when it comes to the tools your team will be using every day, pricing should not be the *only* criteria. Focusing too early on dollar amounts can create a dangerous case of expense-myopia (or perhaps terminal sub-expenditure-opathy).

Related to this concern, astronaut John Glenn's memoirs put the issue into dramatic perspective. While waiting in a small capsule on the top of a 90-foot tall Atlas rocket, he describes his state-of-mind: "I felt exactly how you would feel if you were getting ready to launch and knew you were sitting on top of two million parts — all built by the lowest bidder on a government contract."

Of course, your staff won't be riding into orbit on a controlled explosion, but that doesn't mean each customer interaction isn't valuable. Your team should feel confident in accessing needed information and comfortable in knowing that the technology is going to facilitate solutions, not aggravate people. You don't want the lowest off-the-shelf price to gradually snowball into much more expensive problem.

This isn't to say that product costs have no place in tech decisions. They do set a ballpark for your tech research. And after you've identified multiple, high-quality tech solutions — each of which meets all your company's needs — then the sticker price can be helpful for the final decision.

Reactive Technology

This is a variation of the shortsightedness discussed above, but this type focuses less on price and more on functionality. In short, a business owner might feel that as long as the current technology is more or less functional, then there's no reason to change it. This implies there's no need to explore upgrades unless the system breaks down.

You can see the problem here. When the CRM system goes down (or the ERP suite or your accounting software), that segment of the company will grind to a halt. When things slow to a crawl, that will affect your customers. When your clients lose time (and maybe money), they will also lose trust.

Instead of operating in a reactionary mode of putting out crisis-fires, a strong technology strategy will acknowledge that computers and applications are not a one-time purchase. Technology depreciates, but it also evolves and improves. A better mindset is to plan on proactively optimizing your systems at regular intervals. With this approach, you can plan when there will be downtime, notifying customers in advance, building trust as you take care of their long-term interests.

Untested Backup and Recovery

Even if your systems are optimized, disruptions outside your control can impact your business. We plan for these contingencies, but having a plan is only part of the solution. Your ability to execute on that plan is pivotal. And the only way to verify or measure that ability is to test it.

A full-fledged backup plan will account for both the physical and virtual resources. After making necessary precautions, it can be very enlightening to turn off the power— does the backup system kick into effect like planned? Is your hardware kept stable? Is the data protected? A common theme today is that cloud-based systems are the fail-safe for business data. But what happens when the cloud hosting fails? And just as important, how quickly can you get your operations back onto stable footing?

Office Isolation

If you maintain strict business hours, it should be a conscious decision, not the accidental side-effect of walking through a certain set of doors. Likewise, if you need to finish a project, your technology strategy should enable you to accomplish that work from another location. Contemporary tools are geared for mobility and connectivity. We all appreciate the quick responsiveness our favorite companies provide for us — will your customers feel any different?

Second String QB

Your technology strategy needs to include people. In a smaller company with fewer staff, each member of the team carries more responsibilities. It can be tempting to assign all the network, infrastructure, and software duties to one person. That might be a lot of hats, but at least it's all under the same umbrella. Whether it's someone else on your staff or an out-sourced specialist, knowledge of how to run back-ups needs to be backed up too. In a similar way, if you have found the value of custom-made applications using platforms such as FileMaker, multiple team members should have experience with and access to the development resources. This type of cross-training helps ensure your growing company will be as resilient as possible.

Resilience is a good goal for any technology strategy. It brings attention to the reality that no SMB can solve all tech issues with a single purchase. Creating an optimized infrastructure and software tools is an ongoing process. With a clear plan, you can feel confident that you're moving your company in the right direction each day.

 

Some of these guidelines may seem like common sense after they've been pointed out. That's often the case with good advice. Another rule of thumb is that your technology tools should work together effortlessly. The best way to implement this principle, of course, is for the tools to be from a single suite. aACE 5 is a comprehensive business software package that can eliminate friction in your company's digital tools. From quote to cash, aACE covers your needs for ERP, CRM, accounting, inventory management, shipping and receiving, plus more. This best-of-breed software can maximize your business velocity.

"I would recommend aACE to anyone who wants to eliminate their time spent troubleshooting problems with other programs. We have twelve users and a day doesn’t go by that someone doesn’t comment on how much they appreciate this program." - Claire Wade, Director of Operations, Skip Gambert & Associates

In 2016, the business consulting group Accenture conducted a survey of almost 1,900 C-suite executives around the world. This “Cloud in the Boardroom” study (available as a LinkedIn slideshare) found that even though 95% of these leaders had a five-year cloud strategy, only 38% had aligned their plans with overarching business goals. They were all on board, but only some knew where they were going.

To be fair, the larger the organization, the more complex the task of aligning all the people and initiatives. For a smaller sized company, this sort of planning can be simpler, although it is just as crucial. Writing for TechTarget, writer Esther Shein gathered valuable commentary on the Accenture findings:

Steve Terp, president of Concerto Cloud Services, contributes to the discussion, articulating how cloud hosting should be viewed: a tool for agility, efficiency, and focus on business needs instead of technology. Likewise, Accenture director and tech officer Jack Sepple points out that "cost reduction, business agility, and better data-driven decision-making" are the areas where cloud services can best assist a company.

Amid the many voices celebrating cloud solutions, it can be easy to lose track of these business purposes, as well as the fact that even the most powerful cloud systems are not perfect. While every business will certainly benefit from improvements in agility and efficiency, aligning technology to goals means that the question is not, "Will this somehow help us?" Rather the discussion should revolve around, "What business needs should our company address first?" If cloud-supported cost reductions or improved decision-making is the answer, full steam ahead.

Sepple also points out that the value proposition for cloud-hosted software, whether that is an ERP suite, a CRM package, or an accounting module, has a broad impact. Implementing a cloud strategy might begin with the company officers, but it immediately draws in the IT staff and eventually effects everyone in the company. Oftentimes the success of an implementation will hinge on how closely IT staff, line-of-business personnel, and executives coordinate.

Executives who are confronted by the profit margin each day can have an easy buy-in. Similarly, IT staff will clearly see the technical benefits of hosting software in the cloud. Your technical team might need to ramp up on some aspects of SaaS. The Accenture study found that not all IT team might be instantly ready to deploy a cloud-hosted solution. Brett Gillett from Amazon Web Services pinpoints a few key areas of preparation: understanding software development, how it runs in the infrastructure, network connectivity, performance when different systems are integrating, and security. This learning curve needs to be part of the overall alignment conversation.

The folks who will use the software each day might have the most dramatic impact on their work. To help this segment of your team, the consulting agency SADA Systems recommends taking time to help individuals understand why their work tools are being shifted around. It's possible that from their vantage point, things may not appear to be broken, so there isn't much need to fix them. SADA has formulated a Value Envisioning Workshop for this purpose, which consists of time and attention spent on creating the vision behind the change — a vision that should grow from close alignment with business goals. These goals can be presented in business use cases that your team will relate to, then discussed directly, and delimited with specific success criteria.

Clearly, the desire for a successful move to cloud hosting cannot be made on a whim. And while your organization is probably less intricate than some of the global corporations who responded to the Accenture survey, a small or mid-sized business cannot afford to waste resources in a problematic, ineffectual software deployment. A careful fit of cloud strategy to business goals sets the stage for your success.

 

Going beyond the articles referenced here, a final detail should be addressed. A cloud-hosted situation is also a long-term relationship with a vendor, even more so if they are developing custom apps for your precise business needs, as is possible with FileMaker Cloud. These people are not exactly on your staff, but they will have a critical role to play, during deployment and for months and years after. Be sure to select a group that has a track record of outstanding support.