Reference Guide to SMB Accounting Software Features

Chart of Accounts
The chart of accounts is, for all practical purposes, the business management system. If revenues and costs are not captured and segregated into the best suited categories, the financial statements you produce will be useless.

Transaction Processing
This category describes features that address typical journal entry processes, including general transaction processing, workflow period closing, batch layout configuration, and job cost adjustments.

Month- and Year-end Closing
While you can bill revenue and collect cost information, if this information is not published in the form of financial statements in a timely manner, the statements themselves are essentially useless.

Control Reports
All business management systems must have some form of controls to make sure information is input correctly. Software features covered in this category are designed to accomplish this task.

Financial Statements
Financial statements drive the company. However, for smaller companies this may not be true to the same extent, since the owner or manager should have a "feel" for operations rather than relying on printed reports. Larger companies cannot do this, simply because they are too big.

2. Accounts Payable

Vendor Master File
Master files are the starting point in any application. For accounts payable, the vendor master file must be set up first, as that drives the rest of the accounts payable functions.

Purchasing Controls
While anyone can issue a purchase order, the process should be controlled. This category covers the purchasing process as well as control systems you can use.

Data Input
Once a purchase order has been sent and goods received, the obligation for that purchase needs to be recognized. This category reviews the various steps required to actually get information into accounts payable.

Payables Analysis
Once an invoice has been input, it needs to be approved and scheduled for payment. This category covers those steps.

Check Writing
Once an invoice has been processed and approved, it needs to be paid. This category addresses various check-writing features, including bank account assignment and check formats.

Control Reports
While you may choose to assume that information has been input correctly, that is not always the case. The features in this category address reports that give users the ability to check information to make sure it has been input correctly.

Your Reference Guide to SMB Accounting Software Features

Accounting systems manage procedures for accurately entering, tracking, and maintaining information related to an organization's financial operations. These accounting applications typically support general ledger, accounts payable and accounts receivable, payroll, job and project costing, and multinational accounting.

Many SMBs require that other functions (such as inventory control, manufacturing management, and financial reporting) also integrate with their accounting system.

About This Guide

Although a full accounting system RFP can contain upwards of 4,000 features and functions, we'll focus on the "big picture" features for now, for (obvious!) considerations of space.

You'll notice that we've grouped accounting features by broad category. These categories correspond to a high-level functional breakdown of software features. In this reference guide, we provide a brief explanation of how each category impacts your accounting processes.

If you'd like more information about a full listing of accounting software features and functions, please visit TEC's RFP Templates page.

The Solution

Big Lots chose Inovis Partner Performance Management to manage their vendors. Big Lots will use this on-demand solution to certify vendors to deliver ASNs, monitor the flow of vendor transactions, automate vendor compliance and deductions and remediate poor performing partners.

Big Lots wanted to create a very flexible vendor partnership collaboration process with a system to support that. They wanted custom reporting and 24x7 availability online, and most importantly, they wanted a real-time information feed for both themselves, and to be able to be fed downstream to their vendors to remediate any issues that would prevent the product from getting from the vendor to the store shelf. Inovis offered that solution in a robust package, and Big Lots now has realtime vendor scorecarding availability.They have developed a website where vendors can log on and see their performance every single day, or pull performance data for the last six months or for the week.They can see it in graphic format; they can see their top five issues; they can drill down into each specific issue; they can request additional information from Big Lots.Vendors can interact with Big Lots through the system and all documentation and conversations and e-mails back and forth are captured historically for a particular issue.

"The scorecarding was superior in many ways, as is the ability to drill down into real live data online. If one of the main issues a vendor is having is on-time deliveries, they will see a pie chart, "On-time deliveries are 75% of your issue", and they can click into that and drill down to all of the individual issues and purchase orders and events; they can find out if it"s coming out of one DC of theirs or all of them, or if it"s a constant problem. So Inovis really offered a lot more flexibility from that than the other competitors," added Katy Keane.

The Business Challenge

To improve inventory turns, Big Lots initiated a "Flow- Through Project" to cross-dock merchandise through their distribution centers (DCs). They wanted to eliminate "dwell time" in the supply chain and get the goods to the stores as fast as possible and on the shelves. Cross-docking saves money by speeding up inventory turns and eliminating the need for warehouses to store merchandise. Merchandise arrives at one side of the DC and is split up into shipments and is loaded onto trucks on the other side and immediately sent out to the stores.

One factor in the success of the flow-through initiative is having floor-ready merchandise that can be expedited through the supply chain without having to be re-ticketed or the store associate needing to prep it for sale. Big Lots wanted to touch the goods as little as possible, so they wanted to work with the vendor to create the right product or get it in a format that would go through the supply chain untouched. They wanted to manage that flow by pre-allocating the merchandise. Then when the shipments hit the distribution center, Big Lots could crossdock them and get the merchandise out to stores immediately. But success depended on receiving accurate and timely electronic data interchange (EDI) data from vendors (including advanced ship notifications, or ASNs). With timely and accurate ASNs, Big Lots would not have to open the shipment. The data would arrive ahead of time and get scanned into the system. When the shipment arrived, they would already know how many of each item is in each box on each palette.

Success with this initiative would require a good supplier management system. Big Lots wanted to partner and collaborate with their vendors to make sure that the goods meet their standards and get to the store shelf as quickly and efficiently as possible. They were not interested in relying on a chargeback program that simply punishes vendors for non-compliance. They wanted to collaborate and share data with their vendors to drill down to the root cause of issues and improve performance. When vendors consistently meet Big Lots" standards, the vendor will become flow-through eligible and Big Lots will be able to buy less goods, have faster inventory turn, and the merchandise will be available to the customer more quickly.

Case Study: Big Lots

Big Lots is a $4 billion company and the largest broad-line closeout retailer in the US, with 1,350 stores across 47 states. Big Lots stocks both "replenishment" products, as well as closeout merchandise from a variety of sources, including production overruns, discontinued products and returns."We have very close relationships with our vendors as well as our customers. Our customers come to our stores not with a list or something in mind, but 80% of them come for the excitement of the treasure hunt and finding an excellent value, and so we try to cater to those core customers by providing excellent closeout values every day", says Katy Keane, Big Lots" VP Transportation Services.

One of its many critical business processes is to efficiently deliver goods from all vendors to the sales floor, improving inventory turns and meeting customer demand. Big Lots manages approximately 3000 loads inbound and outbound per week, so enhancing their process to partner with their vendors to make sure that goods move quickly and efficiently through the supply chain and get on the shelves as fast as possible is a top priority.

It is hard enough to manage a replenishment supply chain in a demand-driven economy and Big Lots has the added challenge of managing the supply chain for their closeout merchandise. Big Lots has "never outs""you"ll always find toilet paper, you"ll always find bleach, paper towels"in their stores. However, the bulk of what they manage is closeout deals.They could have a vendor call and say, "I have one hundred truckloads of furniture that need to move from five warehouses across the country into your 1350 stores." Big Lots has to figure out how to get one hundred truckloads in and out of their distribution centers in a week oftentimes. They often don"t know where the buy is coming from or when the closeout is coming.They have to be poised and ready to manage that merchandise throughout the supply chain and get it onto the shelves of their stores as quickly and efficiently as possible.

In the past two years, Big Lots has made huge strides in improving their supply chain environment and increasing inventory turns ' the amount of time a product sits in their hands."We"ve taken our inventory turns from a 2.9 to a 3.5 in just a two-year time frame. We"ve really learned to understand our business more than we ever have before, and what we"re leveraging today is just really efficiencies in our overall supply chain," noted Steve Conley, Big Lots" Director of IT.They have made it a top goal to speed up their inventory turns even faster.