Getting Started with Inventory Clients

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So, you’re looking to expand your practice. Maybe take on an area that might challenge you and increase your knowledge. While most QuickBooks ProAdvisors focus on service clients, twelve percent of the United States gross national product comes from distribution and manufacturing businesses1. And a lot of them use QuickBooks. 

But how do you get started working with inventory clients? First, you may want to decide on which market segment you want to serve. Do retailers interest you? Are distributors more your area of expertise?  If you’re experienced and 'gung ho', you might want to tackle taking on manufacturing companies. Even in these areas, you may want to focus on a specific vertical; like retail jewelers, or pottery manufacturers depending upon your area or interests. The nice thing about the Internet is that we can have clients nationwide and internationally serving our market of choice!

It helps to have some direct experience with inventory, either from a retail or distribution outlet. Understanding the lingo gives you a basic understanding of what’s involved.  If you need to familiarize yourself with inventory terms, you can get an excellent PDF guide to inventory management terms from Wiley, one of the oldest educational publishing houses around.

Once you have a grasp of the terms, you next need to learn the software.  I like working with QuickBooks Enterprise clients because they tend to have fairly uncomplicated needs, and the software is relatively easy to understand. It’s also a good way to learn basic inventory processes, for you and the client. There are many online resources for learning how inventory works in QuickBooks. You may want to visit the official Intuit QuickBooks Enterprise Manufacturing and Wholesale edition website to get an overview of the capabilities. If you’re a QuickBooks ProAdvisor, you should log into your course locker and take the QuickBooks Enterprise Solutions (QBES) certification exam which summarizes many of the inventory features.

Realize that in QuickBooks Enterprise, as well as in QuickBooks Premier, there are basic inventory features, but only Enterprise offers the optional “Advanced Inventory” features. Advanced Inventory features include multiple locations, barcoding, serial/lot tracking and sales order/purchase order management which will require additional learning on your part. Your client may or may not have this additional bundle depending upon their subscription level.

Most QuickBooks ProAdvisors I’ve talked to usually end up with one or two inventory clients a year, whether they planned to or not. The client may have come to them needing bookkeeping or tax work, and the ProAdvisor feels a little out of their comfort zone helping out this kind of client. Although it can seem a little awkward at first, you know you have the organizational and task skills needed to help clients. And these clients need your help!

Most QuickBooks Enterprise inventory clients fall into one of three categories:

  1. A company was using QuickBooks Pro or Premier (or maybe nothing but spreadsheets!) whose business has grown beyond the point where manual processes will support them in getting to the next level.  These clients are more straightforward because they haven’t created any bad habits yet, and you can lay out the plan for them.
  2. Clients that have been using the QuickBooks inventory function for some time, but because they didn’t receive training, and there wasn’t one person overseeing the whole operation, have files that are a mess. These are much harder clients because you need to diagnose what’s wrong and fix the problems, while the users continue to use the program.
  3. Company is coming off another program (or exported from QuickBooks Online). This will require some database skills because you will probably need to extract data from a legacy source, and import lists like the Chart of Accounts and Item List into the new file.  These projects take a long time, as you will have to train users on the new processes and pull over a lot of list and historical data.

“What about all of the third-party inventory and manufacturing products I keep hearing about…Fishbowl, Acctivate, SOS Inventory, etc.?”

Inventory and manufacturing software that syncs to QuickBooks can greatly extend the features needed by our wholesale and manufacturing clients. They basically take over the operational transactions, and ‘push’ the financial data to QuickBooks on the ‘back end’ once those transactions are complete (i.e., a completed Item Receipt for inventory becoming a supplier bill in QuickBooks).  Even QBES is limited in its feature-set, so these programs enhance what can be done for the inventory client, while still allowing the client to stay in the Intuit family.

Choosing which inventory or manufacturing program you will support can be difficult because there are so many add-on products out there that work with QuickBooks.  Start with the target market you want to support.  What are they using?  Also, do you want to work with primarily desktop clients, or are you as comfortable with online products and programs?  Some of the third-party products will only work with QuickBooks Online, and some with desktop, while many of them will work with both.  If you’re just starting out, we recommend ‘Handifox’ for desktop QuickBooks and ‘SOS Inventory’ for QBO. These are fairly straight-forward and easy-to-learn programs. There are usually ‘partner’ programs from the software vendors where they will let you download or open an account for a permanent trial copy of the software with unlimited training materials.  This is a great way to prepare you for your first client.

So, you’ve decided on your target client, and you’ve picked the software program you want to support.  What happens when that ideal client comes along?

  • Do a thorough ‘due diligence’ on the client’s needs. You MUST understand all of your client’s processes around inventory (and sometimes more) and how they do business. Inventory affects ALL functional areas of a business, so don’t be afraid to ask many questions!
  • Have an Engagement Letter prepared. The ‘Proposal,’ as you might call it, should lay out in detail all of the tasks you or your team will perform in this project (and even the ones that you won’t!). This avoids ‘scope creep’ later on (client adding requests outside of the original agreement), and keeps you on the same page as to what will be accomplished. We usually add another document we call, ‘How We Work’ which details out the timeline and expectations of both sides so we can be clear as to what to expect.
  • This is a project; allow time for it.  We usually suggest a minimum of 4-6 weeks for an inventory project, and 4-6 months for a manufacturing software project.  The bulk of the work is broken up into two areas: 1) workflow process development – working with management and staff on the processes that are needed and how they will be implemented in the new software, and; 2) training of workers. People can only learn so fast. If you try to cram too much information into a short period, they won’t have time to grasp all of the processes and procedures and you will end up with a mess and a frustrated staff.

We strongly encourage colleagues to setup trial or ‘sandbox’ copies of both QuickBooks and the third-party inventory/manufacturing software during this phase. This way, the client learns with sample data that’s familiar, and mistakes can be made. Once you’re done, you can export the lists to the new files.

Getting to your first, ‘Go Live’ date is both exciting and exhausting. If done correctly, your client will greatly appreciate how you have helped enhance their operations. And you will have picked up a new skill that will expand the toolkit of your practice. 

1 – Internet Source: https://tradingeconomics.com