Accounting Discussions

Sales side provides for order taking, invoicing, receiving cash.  With management of sales in general ledger, costs, profitability, inventory reduction.  This cycle covers the following: Sales-Accounts Receivable-Cash Management-Customer information.  This allows for recognizing customers that are profitable to the business and how to help them be successful so the business can be successful also.  The customer information with sales history allows for inventory planning as well as cash requirements and personnel management with a eye on physical plant and infrastructure


Inventory side provides for what items to stock, turns, and seasonal items.  Many people make the mistake and put the “check book” on the shelves without enough planning that causes dead stock or D type items.  The classification of ABCDN items are described as the following:
A – Items are quick turning and should always be in stock with safety stock in the calculation.
B – Items are fairly quick turns and could be out of stock occasionally but can be refreshed quickly.
C – Items can be out of stock sometimes and are coming back in and are not considered a item that ties to a A or B item.
D – Wow could show up as a item that may turn in to dead stock – watch the closely.
N – Items well it a NON STOCK item bring in when ordered and not stock.


Purchase order side provides for what you are committing the business check book to in the future and is used to manage whats on order and who its order from and when it due in.  Then it updates the inventory module to show whats on order and when its due to arrive.  When item arrives then it can be received and update inventory and setup the accounts payable.  Now the the information the business gathers from PO is who the better vendors are and with the costing allows the business the see if there are better options for purchasing.


General Ledger is the summary system for all money based information flowing through the system.  I have a saying about the G/L its about 4 phrases:
Assets – I have – the items which I own such as money, inventory, fixed assets.
Liability’s – I owe – the items that I owe for like accounts payable, loans, fixed assets (cars/truck/office/buildings)
Sales – I earn – the items with which I earn money – sales, labor, and such.
Cogs – I spent – the items that I used to make sales – which includes direct items to sales.
Expenses – I spent – yep another spent – its money I spent to keep the business going – electricity, rent, vehicle, labor, insurance.
Retained earnings – Oh yea its about what I get to keep a math calculation between `I earn` and `I spent` – then the fed gets it share
So the G/L is the house keeper of all activities that occur with the business.  We recommend keeping the G/L numbering system simple as only use the number of accounts you really need.  Creating financial reports is easy with Open Systems and Traverse.


Enterprise Resource Planning:
With planning, sales and inventory are well sourced and controlled.  Purchase orders are placed in a timely fashion with options for planned receiving to manage warehouse space and people time.  One of the biggest issues with distributors is filling orders when received then.  Not having back orders that cause extra time and customer discomfort.  By FM3 using the different calculation methods for inventory stocking levels based upon seasonal sales and peaks one can have a 96%+ fill rate.  We here at FM3 are well versed in inventory levels stocking to prevent dead stock or old stock.  The normal loss of value on inventory is about 25% per year.  This is where automated control makes the difference as a person cannot look at 10,000 items and make sure they are in stock to sell not in stock to grow old.
Another help that ERP brings to the table is overall business planning which includes Marketing and Sales, Products, Manufacturing.
Then taking in consideration financial needs and physical plant requirements that ERP help the business to grow and provide for the community in which it exists.



We offer and support several verticals that provide excellent accounting procedures for the following business’s.
Construction: with job cost and certified payroll.  Has the requirements for retainage,  progress payments, job completion, etc.
Manufacturing: with either cell or floor or procedure methods.  Manages sub assemblies,  rollups, full costing, shop floor planning, etc.
Distribution: with details of inventory control, sales forecasting, Sales person accountability, remote communications with order gathers, extensive reporting, tools for working with what if scenarios, Interface to Excel for further manipulation of numbers.  EDI interface and email EDI, as well as custom interfaces for different wholesalers  


Specialty job shop: where a company needs a unique part number that are description based, or just in time shipping or delivery methodology’s,  also ability to have a person emailed or text’d when a part is received.  There is what we call the gopher tool, it runs in the background and performs many tasks in the accounting modules as required. The list is extensive and also many of the enhancements are able to be added to the normal OSAS product line.