How does your enterprise measure the success or failure of a given product or service? Do you measure success by gross profit, total revenue, or does your analysis instead focus on the strategic importance these sales represent for your company? Whilst there are many arguments about how to measure the value of a sale, most companies agree that having access to an invoicing software that captures all pertinent costs, is the most important aspect of defining performance. Simply put, the right invoicing software can capture all inventory and receivable financing costs and can give your company insight into your product’s real gross profit. The COGS (cost of goods sold) on every product or service will be clearly outlined, captured and detailed in order to provide your company with the ability to analyse these transactions at a granular level. The accuracy will allow your enterprise to track the performance of your product & service offering from month-to-month and from quarter-to-quarter, further providing you with the ability to reconcile inventory and financing costs in a fraction of the time it takes with manual processes. So how can invoicing software provide you with a more accurate depiction of your product’s success in its market?
A clearer definition of inventory financing
A product’s gross profit is defined not only by its COGS, but also by the company’s financing costs. Inventory costs money. The longer it’s held, the higher these costs and the lower the profit made on sales. The best invoicing software will capture these costs and ensure the company is able to track these financing expenses both monthly and quarterly. The company will no longer have to question why its costs of capital are so high, or wonder what impact these costs have on gross profit.
Quicker invoices & faster reconciliation
Today’s invoice software does more than just capture costs. Today’s software is capable of reconciling the company’s inventory of finished goods the moment they are received and shipped. No more worrying about the accuracy of invoicing. No more worrying about the impacts of data entry errors. No more worrying about whether volumes match pricing, whether the right taxes are applied on the invoice, and ultimately whether the dates on the invoice are correct.
Stronger Operations Management
Perhaps the most important part of upgrading to invoicing software is that all issues pertaining to billing and shipping locations are easily managed. Your company’s entire operations will improve. Ship to and bill to addresses will be clear, concise and easily managed. Imagine the simplicity of using software where you never have to worry about inaccurate information or the damage that can be inflicted when inputting the wrong address or postal code.
Today’s invoicing software will not only improve how your company manages its receivables, but it will ultimately increase your effectiveness in managing your company’s operations. These systems are live, continuously updated and far more accurate than relying upon manual processes and word documents. In the end, the simplicity of using invoicing software will ensure that all those aforementioned issues are no longer a concern.
