Preferred Retail Systems

Ordering new merchandise can be one of the most time consuming activities in your enterprise. Using the advanced features within RMS to reorder inventory is quick and easy and will save you an enormous amount of time if used properly. RMS can create Purchase Order’s in a number of helpful ways, depending upon your needs at the moment. It then tracks the PO until all items have been received or cancelled and then posts that PO to QuickBooks as a bill ready to be selected and Paid.

Let's take a look at the Purchase Order process, and the most common ways it should be done...

Purchasing is a fundamental activity in retail. It is a Process and when viewed as a repeatable and predictable process we can apply automation that will expedite and bring efficiencies to that process. Long gone are the days when you can simply stroll through your store, look at the diminishing supplies and make a mental note of what you need to order, doing so later from memory. Stores that can bring accuracy and efficiency to the Purchasing process will see an almost immediate benefit and improvement in the bottom line.  Let's review a few basics about how the whole Purchase Order process flows first. Follow along and see if this makes sense in theory: 

1. Accurately determine Inventory replenishment needs based upon sales activities, reorder points, or seasonal requirements
2. Select a Supplier with whom you wish to create a PO and add the items that need to be reordered or ordered the first time
3. Create the purchase order and submit it for processing
4. Receive the shipment, verify the contents, and close out the PO
5. Post your PO to your accounting system and pay for the items in a Payables Check Run

 While this probably seems obvious to many of you, this is what I observe happening in other small retail operations: 

1. You attempt to sell a shoe for which you have no stock (and probably loose the sale)
2. You go to the Z-Coil Website and order it along with a few items you can remember
3. You pay for it with a Credit Card or pay the Bill which arrives sooner than the inventory
4. You receive, unpack, and then shelf the items
5. You get the bill and it invariable is different that the order
6. You spend a lot of time trying to determine which items you received and did not receive
7. You wonder why the day passed and you were unable to get your marketing piece finished

Does this or something similar seem too familiar?

The simplest way to approach reordering inventory, when you are comfortable with your restocking levels is to establish a process that keeps you ahead of the game and is predictable and methodical. We have found that once your store has been operating for a few months, all you have to do is determine a predefined period and then create purchase orders at regular intervals based upon that period.

For example, let’s assume that every Monday morning you are going to reorder all of the items you sold last week on Monday through Saturday. With RMS, it is as easy as Opening a Purchase Order, and then selecting the dates, and clicking the OK button. It will calculate every item sold during the period specified, set the quantity ordered to that sold, and create not just one purchase order, but all of the purchase orders from all of your suppliers. Furthermore, in the case of multiple suppliers, it will actually order from the supplier with the lowest cost.

Now take a moment to open each PO and review what you sold and adjust up or down any items within the PO. Additionally, you may need to add to the header page information about your shipping preferences, contact information, or other special requirements. When finished, print a copy of the PO and fax it to your supplier. Chances are that the very nicely laid out form that RMS creates will fulfill all of their documentation requirements.

Repeat the process for each PO created and then move on to more important tasks. RMS has the capacity to turn any PO into an XML file for EDC (Electronic Data Capture), but currently Z-Coil is incapable of using this feature. So we will discuss this possibility later. Essentially an EDC purchasing system will allow you to send your PO electronically like email, and the Supplier can capture that order directly into their ordering system without human intervention and without the use of paper. This improves accuracy and speed of supply chain management.

Once your inventory arrives, you will be equally delighted with the process made simple using RMS. But in order to make this happen, you will want to have a workstation (Laptop is fine) near the shipping and receiving area that has a Barcode Scanner attached. This simple but powerful device will accurately and quickly read your items received and tell you what is missing.

Open your PO in RMS, select receive, and start receiving merchandise. As the merchandise comes out of the shipping boxes, scan it. When you are finished, review your PO and determine if the number of items matches and if so commit the items to inventory. Once all items are received, your PO will change to a closed status. All PO’s that are in a closed status will automatically post into QuickBooks as a bill during the daily accounting procedures.

Alternately, with same sized objects such as Shoe Boxes, you may wish to take all of the received items out and stack them (in any order) on a rack with the UPC code facing out. When all boxes have been placed on the receiving rack, then simply walk along with the barcode scanner and zap each individual box once. Again review your PO, commit the items to inventory, and then send the Rack of shoes (wheels anyone?) to the showroom for stocking.

Summary: Three things are time killers with respect to Purchasing. First deciding what to order can be very frustrating without a process and a system. Second tracking the receipt of those items can take much time as you often receive only partial shipments. And finally, accounting for, reconciling, and then paying for those items using your accounting system can make you cross eyed and weary. How many of you right now have a big pile of invoices, order forms, and packing receipts all neatly stapled together on your desk?

Clearly we cannot eliminate the paperwork and clerical effort associated with Purchasing. But we really can reduce it markedly.

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