Our president Alex Koves recently talked to SourceForge, an Open Source community resourceabout why small- to mid-size manufacturers use batch manufacturing software and QuickBooks to better manage their businesses.
Why do manufacturers need both QuickBooks and an app like Mar-Kov?
Batch manufacturers benefit when they use QuickBooks and an app like Mar-Kov because the two platforms were designed to perform very different tasks. QuickBooks handles finance and accounting incredibly well, and although it now has inventory management capabilities, it only tracks finished products.
Specialized batch manufacturing software offers robust raw material inventory management that also provides the critical traceability customers demand and schedules production to meet customers’ deadlines. Mar-Kov delivers accurate, timely traceability for manufacturers and makes it faster, easier and less stressful to meet FDA, HACCP, SQF, BRC, and other regulatory requirements.
What happens when batch manufacturers stick with QuickBooks without investing in batch control software?
In our experience, batch manufacturers that rely exclusively on QuickBooks tend to overstock, deal with stockouts or try to “fix” QuickBooks.
These are the results:
Overstocking: They have the necessary raw materials, but it’s always expensive.
- Negative impact on cash flow
- Cash that’s tied up in inventory isn’t making money
- Interest fees apply if they’ve financed it because they lack cash
- Extra warehouse/storage carries a cost
- Raw material has a best-before date – miss it and it has to be replaced
Stockouts: Stockouts are even more expensive than overstocking.
- Missed, late production affects the top and bottom line
- Delayed/cancelled orders hurt a company’s reputation and its customer relationships
- Last-minute raw material orders can cost more and incur higher delivery fees
- Lower profit margins due to increased total cost of raw materials
- Higher prices to customer to maintain margins
- Loss of customers due to delays, cancellations and higher prices
- Salaries are paid whether or not employees generate income
QuickBooks Fix: When employees that are not developers or programmers adapt QuickBooks, the raw material inventory fix is inevitably error-prone and unreliable.
- Inaccurate, missed and late deliveries lead to dissatisfied and lost customers
- Poor traceability can be catastrophic for customers
- Raw material stockouts affect production and employee morale
How do Mar-Kov and QuickBooks split the responsibilities?
We created Mar-Kov to excel at meeting batch manufacturers’ unique needs, much like QuickBooks focused on superior finance and accounting for multiple sectors. And because we know QuickBooks is the go-to for many companies, Mar-Kov was designed to seamlessly integrate with QuickBooks so that manufacturers can optimize their operations and financials.
Here’s what Mar-Kov and QuickBooks respectively do best:
- Inventory and Costing – detailed inventory valuation
- Purchasing, Receiving, Sales, and Shipping, Customer Invoicing, Supplier Bill Entry
- Process and quality test results
- Authorizations & signatures are dated, captured and stored
- Preventive maintenance, calibration and sanitizing of equipment
- Sales Analysis; Margins by Customer, Item, and other categorizations
- Receivables (AR)
- Payables (AP)
- General Ledger
- Profit and Loss, Balance Sheet
What should companies look at when researching batch manufacturing software?
Batch manufacturing software is a significant financial investment and it gets expensive if you don’t get it right the first time so do your homework.
To start, you need to focus exclusively on standard (off-the-shelf) not custom software because the cost of building and maintaining custom batch manufacturing software is prohibitive!
Talk to established companies that have been around long enough to update, upgrade and work out their software’s bugs and have gained experience with implementation, training and support.
Ask these questions to identify the software that’s right for your batch manufacturing business:
1) What is your budget?
2) Do you want to pay a one-time fee or buy a subscription?
3) What is a reasonable ROI for your firm?
4) What capabilities do we need today?
5) Which capabilities will we need in 5 to 10 years?
6) Is this software scalable – can it grow with us?
7) How long will implementation and integration take?
8) Does the software provider offer superior onboarding, implementation and training?
9) Do I want cloud-based or on-premise? Why?
10) What type of support is available? (e.g. online, phone, email? Monday to Friday, 24/7?)
11) Are the reviews/rankings positive? What can you learn from them about potential issues?
12) Can you book a demo?