Sponsored By 
Inventory management systems focus on inventory. They cover point of sale but started in inventory.
Inventory Management Systems
In this episode, let’s talk with Tony Harcourt of Rype in Sydney about inventory management systems, especially Cin7, Dear and Unleash.
Here is what we learned but please listen in as Tony explains all this much better than we ever could.
To listen while you drive, walk or work, just access the episode through a free podcast app on your mobile phone.
Inventory Management Systems
It all comes down to how you buy and sell your product, and how you manufacture your product.
A budget of AUD 20k or 30k is not a bit sophisticated. If you are an e-commerce that runs a million-dollar company, AUD 20k is just 2% of your income It will come back right away.
Three Buckets
When you look at inventory management, there are three buckets.
Bucket # 1 – Comes Free with another Software
In the first bucket, you have tools that come free with another software like Xero and Shopify.
Very basic but a good way to start. Only dispatches the goods or receives the goods on the purchase or invoice date. You can’t add variables to landed costs. And you can’t see incoming goods.
Bucket # 2 – Stand alone IM
In this bucket, you have stand-alone inventory management software that integrates with accounting software like Xero and Quickbooks. Examples are CIN7, Dear and Unleash.
More variations, support foreign currency transactions and give you more accurate landed costs. You can see your actual margin, stock on hand, incoming stock, allocated stock. The software also support multiple warehouses.
Bucket # 3 – ERP
And then you have Enterprise Resource Planning (ERP) Systems that cover the whole lot. Examples are ERP Oracle, SAP and Net Suite. Tax however often sits outside these ERPs.
Implementation cost
Implementation costs for stand-alone IM solutions vary from AUD5k to AUD50k. It depends on the number of products, the number of locations and number of sales channels.
Setting up an inventory system is NOT just getting your customer list, your supply list and uploading your products.
If you are a small player, 100 SKUs, 1 Shopify account, 1 location, you trade in one currency even though you buy in another currency, implementation cost should be AUD 5k.
Differences Between IM Sofware
How do Dear, CIN7 and Unleash differ from each other?
Unleash does a very good in calculating of special charges and duties. If you are a winery for example paying wet taxes, Unleash will be perfect.
Dear has a really good user interface people understand. Dear is more flexible around costing. Unleash uses average cost. With Dear, you can choose between first in first out, batch costing etc.
CIN7 is similar to Dear around costing, CIN 7 is a slightly more powerful product if you are running more than 10 prices and you got a really complex discount structure. It is perfect if you use EDIs or third-party logistics.
They are all fantastic products. A lot of it comes down on how you buy and sell your products or how you manufacture your products.
Bring the Experts In
When you decide to move into an inventory system and engage with an expert, you don’t need to know which software you want to change to. Get the experts to help you with this choice.
They will ask you how your business works, what problems you encounter, what you sell, who you sell to, how you sell it, how much you sell it for. And then it is their job to figure out which of those systems works best for you.
MORE
From PI over FYI and Suite to KarbonHQ
Disclaimer: Tax Talks does not provide financial or tax advice. All information on Tax Talks is of a general nature only and might no longer be up to date or correct. You should seek professional accredited tax and financial advice when considering whether the information is suitable to your or your client’s circumstances.
Last Updated on 14 June 2022
Tax Talks spoke to Tony Harcourt - CEO at Rype Group - for more details.
