Friday, February 07, 2014

SOP Friday: Vendor/Distributor Record Keeping

In a perfect world, everything you need is available electronically, and is easy to search through. So when you need information, it's only a click or two away.

We don't live in that world.

Distributors (Ingram Micro, Synnex, D&H, etc.) are getting better at making information from past purchases available. But this is an area where you can create a very simple, very low-tech solution for tracking the information you need.

First, let's look at the information you need to keep and track.

Let's say you have two primary distributors, such as Ingram and D&H. But occasionally you buy RAM from the Crucial web site or software from CDW's reseller program. In the buying process, you might send purchase orders, receive invoices, and receive packing slips with merchandise.

This information is easily divided into two types: Financial information and merchandise information.

Financial information is primarily tracked through your QuickBooks or other finance tool. Once any disputes are settled, you will probably never need this information again. If you do need it, you'll find it in your system.

Merchandise information is more specific to the items you buy and sell. This is an interesting collection of information that you rarely need. But when you do need it, having it at your fingertips is priceless. For example, you might have a complete list of serial numbers on a packing slip. Or you might have all kinds of detailed information about a server install.

The papers you'll find with these juicy bits of information are primarily invoices and packing slips. Again, invoices might be available electronically, but not necessarily easily available electronically.

You might create a process to scan all these documents into your PSA or into client folders on your SharePoint site. But I don't recommend that. The truth is that you will rarely use these documents, so it's probably not worth creating a lot of work. Keep the documents you already have in paper format and don't fret about the rest.

Here's what I recommend.

1) Whenever you pay an invoice from a distributor, stamp it PAID and write the check number (or other payment information) on it.

2) Whenever you receive a packing slip that includes information you might find useful, add it to the file system.

3) Three-hole punch each of these documents and place them in a binder in chronological order.

If you have a low volume of product sales, you might keep all of these in one binder with a tab for each distributor. If you have a higher volume, you would dedicate one binder for each distributor.

Keep each binder for four years. Then shred the contents.

Using this Information

Here are a few examples of how we've used this information:

- When ordering hard drives to match or replace existing hard drives, we can quickly find the exact items ordered.

- When we want to refresh our memories about the server we sold three years ago so we know what we're replacing, we can go to the month of the sale and find all the related product descriptions.

- When there's a debate or discussion about when a warranty was purchased, or the type of warranty purchased, we can go right to the invoice.

Generally speaking, it works like this: Mike asks me what kind of drives are in a server we sold three or four years ago. I start by looking in QuickBooks. Since I know the client, there aren't many large hardware purchases to go through. I find the month of purchase and the invoice numbers for the distributor.

At this point, I simply open the binder for that distributor and flip to the month. I find the invoices within a minute or so. There I see the drive form factor, size, and speed. In fact, I have serial numbers in case that information is useful.

This process takes about five minutes in QuickBooks and about two minutes with the paper binders.

We probably use this information about once or twice a month. So it's not worth putting a huge effort into. If we didn't do this, we'd have a scavenger hunt once or twice a month.

This process is best left to whoever handles most of the product ordering for your company. But you need to make sure that technicians and whoever opens shipments pass the packing slips to this person for filing.

Obviously, you will need to fine-tune this SOP for your organization. Just make sure you keep it as streamlined as possible. Don't make it complicated or labor-intensive.

Comments welcome.

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About this Series

SOP Friday - or Standard Operating System Friday - is a series dedicated to helping small computer consulting firms develop the right processes and procedures to create a successful and profitable consulting business.

Find out more about the series, and view the complete "table of contents" for SOP Friday at

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