Inventory Management Systems Blog Series #2
Posted by Kevin Reynolds on August 21, 2013
The Take-Over-All Inventory Management System
The most common form of inventory management solutions in the marketplace is a system in which all inventory management functionality is removed from QuickBooks and put into a separate inventory management system. Most of these solutions are older client/server style solutions and have years of enhancements built-in, as with most things in life, there is both a positive and a negative that comes with these solutions.
The positive is that by taking over all aspects of the inventory management from QB, managers can create functionality that a deeper integration with QuickBooks will not allow. The limit is never QuickBooks, but only their own imagination. Because of this, independent inventory programs generally offer some advanced functionality that QB or the combination of QB and RI, simply can’t match. Excellent examples of this include advanced costing methods and multi-level bill of materials. If you rely on QuickBooks for your item list, as Rapid Inventory does, it becomes very difficult to provide this functionality since QuickBooks does not natively support it.
The negative is that they take over all aspects of inventory management from QB. This is such a benign statement, yet its ramifications are huge when it is truly thought through. If you are a manufacturer or a wholesaler/distributor, everything that you do in your business revolves around your inventory. If you move all the inventory management to a program like Fishbowl, then you have to move all your employees to Fishbowl as well. At the end of this process, QB is only going to be used for AR, AP, and GL journal entries, and the only person using it is your accountant. All purchasing, sales, costing, and reporting is now in the inventory management system. This is a costly problem. You have to buy user licenses in the inventory management system for all your employees, you have to train all your employees on how to use the new system, and if you decide you want to hire a new purchasing manager, the odds of finding one that has used QB are quite good, but the odds drop dramatically when you advertise for a purchasing manager with knowledge of Fishbowl.
In general, these solutions offer great functionality, but they force people to leave a product that they love, QuickBooks. Check back in tomorrow to learn how this problem can be solved with a Deep Integration solution like Rapid Inventory.