Be On The Alert

Distribution Company Case Study

Consider the case of the distribution company where the key to profitability was the management and fine tuning of its product pricing model. It turns out that some overzealous sales reps were pricing goods too close to cost, and, even though sales were up, they weren’t making it up on volume. The answer was a business alert, sent each time zealous Zelda or anyone else entered a quote or order with a product margin below a set percentage.

Think Alerts. Its part of the evolving approach to improving business processes, much like the Think CRM I covered earlier this summer in my June/July 2007 column (www.cpatechadvisor.com/go/1577). If you make the use of a tool part of your corporate culture, you will get the full benefit. So Think Alerts.

What the distributor got was a BAM tool for its accounting software, in what is commonly called a Business Alert. In essence, it was a logic statement that said, “If any orders are entered where the margin on the item sold was less than their threshold, immediately send an e-mail notice to the sales manager showing the Sales rep, the customer, invoice number, date, the item price and actual cost.” The sales manager turned this information into a teaching tool for the sales team, and, in the end, margins went back up and profits followed.

Small Contractor Case Study

Consider the case of the small contractor who uses QuickBooks Job Cost and sometimes under bills his customers. Usually, the reason is because job expenses were not getting billed. The contractor needs another tool in his belt: Alerts. One of the features of QuickBooks is Alert functionality to send a notice when there is any unbilled time or expenses tied to a customer. That’s a smart way to help ensure you get paid for all your work and expenses.

Think Alerts, and you can begin to imagine other ways they can help

How much time could a business save if the accounting
system could monitor inventory levels for top selling items and automatically send a reorder request to the vendor when quantities fall below a specified level? You can quickly lose customers when a product is out of stock, but you never lose the opportunity to sell if your systems are smart enough to keep popular items in stock.

How could an Alert help a restaurant supplier reduce its spoilage costs for food? In most cases, the meats and almost all the dry products sold have expiration dates. If they were set up with lots, which is common in an integrated accounting system like Microsoft Dynamics GP, then the expiration date for all items is stored when the information is entered or imported. Lots are very effective in reducing spoilage since they can sort by date. Add in the BAM tool, in this case, known as Business Alerts, to shoot off an e-mail to the inventory control manager when the date on a lot is within 30 days of expiration. No pun intended, but watch how that beefs up the bottom line.

How about Business Alerts as a money maker. It would be if you tied it to collections. It’s easy for a customer to fall behind in payments, but not when the VP gets an alert each time a customer is 60 days past due. And if protecting a good credit rating is important, a Business Alert can also e-mail the owner if a vendor payment is more than seven days past due.

While Business Alerts can be effective, they can also be addictive. But that’s okay if it helps your business. It is best to start small. Basic needs could be as simple as sending an alert to the sales department when a quote is about to expire, or, to help remember birthdays or anniversaries. An e-mail sent to the right team member gets the right information in the right hands in a timely manner.

Software publishers have been adding alerts for some time, but often they are not well publicized among all the other features and benefits touted. Sometimes there is a cost, but often they are included in many of today’s Business Management and Accounting systems. The popular term is Business Alerts,
championed by the likes of Sage MAS 90 or MAS 200, and by Microsoft in Dynamics GP. QuickBooks and MAS 500 alike refer to them simply as Alerts.

There is also a class of BAM products that integrates with a variety of systems with directly written links or use of Software Development Kits (SDKs). These historically have been more costly and geared to larger companies. This is not the case anymore. A Vinyardsoft product called KnowledgeSync serves the middle market. Microsoft also has SQL Server Alerts as an inherent part of Microsoft SQL, which monitors events on your SQL server. Our clients get the benefit of an alert when hard disk space is getting critically low. It prevents a system lockup and damaged data by allowing the issue to be addressed before the hard drive fills up completely.

Think Alerts and you’ll do more than just scratch the surface, as this column has done. What business activity do you want to monitor? Yours may not bring as much publicity as one of Emerils’s BAMs!, especially when it is followed by a hot plate showcasing the recipe. Still, a well thought out Business Alert will keep you on top of the vital business information you need before it gets cold. BAM!!