With the rise of Amazon, online shopping, and a pandemic that forced millions to abandon brick-and-mortar shops, the wholesale distribution industry has seen a surge in growth over the past few years.
Many distribution executives are wondering how businesses can take advantage of this wider ecosphere trend. The pressure on wholesale distributors to adapt to the digital age has forced them to question their traditional distribution models and keep up with industry disruption.
The accountants and finance executives are at the heart of all this change. What is the state of our business? What can we do to grow strategically (and more intelligently)? What are the risks we can afford? What technology is available to make our business vision a reality? These are the questions we need to answer.
CFOs need accurate information about their company to answer these questions. This is a difficult task for many wholesale distributors, which are growing. Companies often find that their initial technology is not able to scale with them as they grow. Multiple applications might have business intelligence. Sometimes, they are separated by function and sometimes by location. Four ways that CFOs transform their distribution businesses with modern accounting and business intelligence have been highlighted.
The Current Focus of CFOs is Industry Disruption
We have learned over 25 years of working with business executives that CFOs who focus on these four points are more likely to be able to adapt to and facilitate growth.
- Business performance
- Scalable technology for business
- One source of truth
- Innovation
Visibility is key to business performance
Growing businesses often find themselves in siloed business systems. Arion ERP is a common solution that many companies use for wholesale distribution. However, as revenue grows, employees increase, and new locations are created, other systems are needed to address the immediate needs. Systems that aren’t integrated or no longer serve the business in the long-term have a negative effect.
How many different, unrelated applications does your company have (sales CRM and HR, payroll, e-commerce, accounting)?
This is how CFOs handle it by moving all their applications to one system with embedded business intelligence. They gain real-time data about how their company is performing.
Companies in the wholesale distribution sector can make better business decisions about their top priorities by having real-time data.
- Revenue growth
- Profitability – Increasing
- Customer retention
- Improved inventory management
- Training for employees
Four ways real-time analysis can help CFOs
- Stop wasting your time with “Hunt for a spreadsheet”
- Management reports that are more reliable and current, and therefore better for business decisions.
- Instant access to data regarding the business performance
- A comprehensive view of all business units
How real-time data impacts customers and suppliers
- Up-to-date, accurate order information
- Accurate inventory
- Faster, better customer service
Scalable technology
Over half of CFOs are not confident in their reporting methods. Combining this with the current focus on business management through key metrics, finding “one source” of truth has become increasingly important. One source of truth is one business system that provides all the necessary business data.
Wholesale distribution companies that grow often run out of room for tools such as Arion ERP. This can be solved by applying bandages, which include limiting access to certain employees, adding tools that aren’t connected, and manual work.
Businesses can move away from legacy ERP or other starter accounting systems to increase the functionality of their software and gain one source of truth about the business. This allows you to eliminate any unnecessary tools or add-ons and reduce manual work. Accounting can also easily access accurate financial information.
CFOs who use Arion ERP to get a more robust solution to have, among other things, more room to manage their business better and expand their reach – whether it’s more product offerings, new markets, or growing their team.
CFOs who use modern enterprise software are able:
- Collaboration is key – within and between departments. Online collaboration is possible to help teams close more books quickly.
- Mobile expense management is possible with the mobile app. You can also take photos of receipts.
- Give employees modern tools that will enable them to be more productive and engaged. Empower employees.
- Globalize (or go national) – Work across multiple subsidiaries, countries, and currencies.
Companies that have moved from legacy ERP to Arion ERP for wholesale distribution are able to translate their business results into tangible business results:
- Doubled productivity in accounting (amongst other departments).
- Improved customer service and real-time visibility
- Stable positions to expand
One source of truth
You will need more than an accounting system to manage your wholesale distribution business. Financial and accounting teams with employees located in different places and/or working remotely require more robust tools to enable them to work together online.
CFOs who move from their basic accounting system to a more comprehensive business software program are able:
- Spreadsheet smarter – Access database information directly from Excel – Use a simple user interface to retrieve, update, add and delete data in real-time
- Report better – Accurate, sophisticated reporting for internal as well external purposes
- Get a complete view of your business, all financials and company information in one place.
- You can manage your business using one software – finance, inventory, sales, and operations all in one.
46% of wholesale distributor companies ranked e-commerce their top technology priority in 2019. It was also the fourth consecutive year that it was voted the highest priority overall. Modern CFOs have a dual purpose: to get their financials in order and set up their businesses for e-commerce and other digital initiatives using one solution.
Innovation
CFOs can now focus on business innovation and less on technology by moving to an integrated financial system for wholesale distribution.
Anyone who has spent too much time trying to figure out how to manage the IT department of a business can tell you that they are not interested in hosted, secure, and supported applications. Today’s CFOs in the wholesale distribution sector need a business system that meets current standards and provides the control frameworks that they require at a price that is affordable for their business. Businesses that invest in enterprise resource planning solutions typically see a return on investment of $7 per dollar. One survey found that businesses saw a return on investment of more than 200% after a 16-month period.
CFOs who leave legacy ERP and similar systems behind to create a better enterprise system can:
- Real-time analytics and better business information can help you make business decisions.
- Future growth is supported by the ability to work across languages, currencies, and locations
- Business performance can be improved by better financial controls, more automation, and smarter business decisions.
CFOs now focus on business innovation and are leaving behind IT worries associated with accounting software that isn’t up-to-date for their business. They can enable more robust systems by:
- Multi concurrent users
- You have virtually unlimited file storage
- Security assurance
- Database performance
- Backups automatically
- No painless upgrades/upgrades
Conclusion
Arion ERP can improve your inventory management by reducing the time, effort, and resources required to keep track of adequate stock levels. You can create workflows that will automatically send quotes to vendors based on stock levels. You can set minimum stock levels to ensure that your inventory is always replenished for wholesale distribution and you meet consumer expectations.