Client Chronicles: Lush Candy – Step 1 – Start at the End
Scenario:
Lush Candy owner, Laurie Pauker, set up her candy kitchen in LIC, NY and spent the past year building a nice clientele consisting of NYC gourmet food stores and individuals looking for something different, and delicious, as event and party favors. Poised for growth in 2010, she needs to get serious about her accounting and is looking for more detailed information about the finances as well as her raw ingredients and finished products.
Software:
Peachtree Premium Accounting 2010
Typical of many small business owners, they do most of the work themselves including sales, marketing, purchasing, negotiating, pricing, and bookkeeping. As a result, there is a lot of information in their heads. Once the business starts to grow it becomes not only difficult to maintain all that information, but it can also be detrimental to the growth of the business. Things WILL be forgotten, and when employees hit the scene, having to wait to talk to the owner to get answers can result in lost sales.
Laurie, however, is in a great frame of mind because she KNOWS she needs to get organized and utilize more of the features in Peachtree. She is filling in the proverbial “cracks” before they appear. Using the software to support her business achieves two things;
1. she can focus more of her energies on business development and
2. all the important information is being tracked so she can retrieve it at any time.
The first step in the process is to start at the END.
I tell all my clients that they need to think about what they want to achieve when we are done. It is vital to understand their goals so we can build the appropriate foundation. (In database terms – we need to know what information is required on the reports to insure the right fields are being created/used.)
Laurie had some thinking to do. I needed to know:
Exactly what information needed to be on the reports?
How she wanted to see the information presented?
How detailed she needed the details to be?
How many ways did she want to “slice and dice” the data in order to paint the clearest picture of her growth so she could accurately forecast?
Her answers resulted in us having to do some modifications to her chart of accounts (financial categories) and a total revamp of her inventory items. In order to track her cost of sales, including the candy ingredients and packaging, she needed to enter all the pieces as separate items and then create the finished product as an “assembly”. This process would allow her to track inventory levels for all these items, enabling her to more accurately purchase the ingredients and limit overage and waste. This is especially important in the food industry where items have expiration dates.
Once she has completed these changes, the next step will be to use the processing in Peachtree to track the information. Stay tuned…..
Efficiently yours,
Ellen DePasquale – The Software Revitalist™
RESOURCE:
Managing Inventory for Profitability an article I wrote for Inc.com.
