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We’re fortunate for the opportunity to get expert tips directly from David Lin of DL & Associates. He shares his recommendations for boosting efficiency with the right apps in this blog. DL & Associates have been helping retail clients for fifteen years with QuickBooks set up, migration, onboarding and retail tool and platform setup. David was recently featured in our Let’s Get Retail podcast focused on boosting efficiency with apps.
There are a few common efficiency issues I regularly helps clients address:
- Credit card processing and reconciliation
- Inventory management
- Management of multiple channels
Inefficiencies have the greatest impact on employee costs. Without the right apps, management of the back-office processes is done repeatedly and manually. For instance, when a retailer chooses to use a POS which isn’t integrated with their accounting system, the credit card reconciliation likely requires separate workstreams to complete. If reconciliations are done manually, they require additional time from a team member to complete.
Selling on multiple channels
It’s common for retailers to be actively selling on multiple ecommerce channels. I have several clients who sell on multiple platforms. Amazon requires retailers to keep inventory updated on the customer facing site. If a retailer’s systems aren’t integrated and synced with an accounting platform for up-to-date inventory, it becomes very difficult to manually update inventory in real time. Complexity grows as more ecommerce channels are added. If a retailer also sells in a physical store, inventory is impacted by multiple places. To avoid stock outs, inventory must accurately reflect sold product.
The right tools
I categorize the tools in two types, “back office” and “customer facing.”
- Back office = accounting system and ecommerce automation tool
- Customer facing = POS
If you start with an accounting system such as QuickBooks Online, you can connect to other cloud-based tools that integrate with it, creating end-to-end efficiencies.
- Ecommerce automation tools are typically cloud-based apps that handle sales data, inventory and shipping. Examples include Webgility, which requires a POS system to do credit card processing.
- Some options include POS as part of the system. Examples of ecommerce automation that include POS are Shopify and Lightspeed. These solutions can also include other features such as an online store or order fulfillment.
To simplify the POS workstream, I recommend using “in app” credit card processing. The integration itself is more valuable than finding the lowest processing rate.
It’s clear to see that integration helps alleviate the back-office workload and the risk for manual error with credit card transactions, sales and inventory. If you sell on multiple ecommerce platforms such as Amazon, eBay and a website, I've noticed that Webgility works smoothly across the channels to manage and streamline the process. Integration keeps inventory up to date automatically in your accounting system and on each online sales channel.
Ease of adoption
Start by researching the app options to determine which is the best fit for your retail business. Some tools may offer different capabilities that are better for a retailer in the long term. Others may be easier to set up but may lack scalability. It’s very important to consider up-front costs, costs over time, long-term business needs and growth.
I’ve helped numerous clients research the best fit for their retail business, then help with set up and training. When we research, we work with the client to think at least 1-2 years out when considering which apps have the right capabilities.
The result of doing thorough due diligence is saving the retailer money and setting up for growth. It’s always strategic to consider the steps required to complete back-office tasks and think about how to automate the steps. This streamlining through automation is an effective foundation for growth.
Below, I've outlined a detailed example for comparing the upfront cost of implementing an integrated system vs. manually managing your sales channel. This straight dollar comparison doesn’t include the cost of missed sales due to stockouts, disappointed customers and the inability to scale quickly.
- Calculate the labor hours of the task.
- The total cost of the labor per year is your budget for adopting the new app.
- In general, if the ROI is expected to be less than or equal to 1 year, the app is worth adopting. If ROI is expected over one year, you may review other factors that may justify the implementation cost.
| Cost of manual management $14,400 per year | Cost of app implementation: Year 1 $9,000 | Management after app implementation: Year 1 $2,400 per year |
| Review your business processes and identify those that require labor hours. | Now, calculate the year one cost of an app, which includes the app subscription fee for the first year plus other fees associated with app implementation. | After the app has been implemented, the labor cost is significantly reduced. |
|
The first-year cost of an app is $9,000 ($2,000 subscription fee per year + $7,000 one-time implementation fee) | 30 minutes per day to manage $10 per day $50 per week $200 per month $2,400 per year |
| Year 1 | Year 2 and after | |
| Cost with app | $ 9,000 Implementation: $9,000 including subscription and implementation fee |
$4,400 Management: $2,400 Subscription fee: $2,000 |
| Cost manual maintenance without app | $ 14,400 | $ 14,400 |
| Savings | $ 5,400 | $ 10,000 |
Get in touch with DL & Associates or another QuickBooks Solution Provider for an assessment of how your business can boost efficiency with the right apps. And check out our retail site for more blogs and podcasts focused on helping you grow your retail business.
All opinions and advice expressed here are personal and do not represent those of Intuit QuickBooks. We recommend you work with a professional to assess your specific business needs. Additional terms, conditions and fees apply with app integrations.
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