Four ways to manage costs and improve margins in times of inflation

Blog updated on 2nd November 2022 by Harry Procter

We all know that Inflation is bad for business because rapid changes in the cost of goods squeezes margins. This is because manufacturers and wholesalers can be reluctant to pass on increased costs. And there are a couple of reasons for this reluctance:

• In many cases they may not have the necessary systems to inform decision making. Their systems may be dishing up old data and inaccurate forecasts.
• Frequent price changes can cause customers to shop around. So, why take the risk?

But there are things you can do. Here are four suggestions using SAP Business One as an example.

1. Improve supplier management

Where appropriate this will mean shopping around for better prices and using MRP to streamline and automate purchasing. MRP ensures that you are purchasing from the approved/preferred supplier for each product and helps you plan materials requirements across your business and stock locations. Improved forecasting and automation of manual tasks reduces costs and improves the customer experience.

2. Leverage powerful forecasting capability to plan ahead

Materials Requirements Planning (MRP) in SAP Business One includes powerful analytic capabilities to improve the accuracy of forecasts. The combination of more accurate forecasting and automation of manual tasks results in the following key benefits:

• The right level of stock is available when you or your customers need it
• Cash Flow is improved by purchasing Just In Time and not having money tied up as stock on the shelf
• Purchasing from preferred suppliers at agreed prices whilst ensuring consistent quality
• Accurate and real-time visibility of stock improves Customer Experience

3. Improve sales management and sell more

SAP Business One includes all the tools you need to streamline the entire sales process. For example:

• Maximise opportunities for up-selling and cross-selling with real-time display of popular, recommended, and complementary products.
• Stay in tune with open quotes and orders, ensuring you stay on top of the game and close as many successful orders as possible.

And satisfied customers become repeat customers. After all, it is more profitable to sell to existing customers than it is to acquire new ones.

4. Better information and analytics result in better decision making

To win in fast-moving markets, you need rapid access to information that enables you to take decisive action. SAP Business One empowers faster, more agile decision-making with dashboards that include pre-built components and KPIs. Drill down to view the detail that lies behind headline figures.

Here are just a few of the analytics tools included in SAP Business One that are designed to help you make better decisions:

• Role-Based Dashboards
• Graphical Cash-Flow Forecasting
• Multi-Dimensional analysis
• Stock Reporting
• Crystal reports

About SAP Business One

SAP Business One is a comprehensive business management solution for growing companies just like yours. It provides everything you need... at a price you can afford.

If you would like to find out more about LAKE and SAP Business One, please register for one our regular SAP webinars, or call me now on 0113 273 7788.

by Harry Procter

Blog Contributor.