In 2021, organizations that didn’t have zero trust incurred an average breach cost of USD 1.76 million more than those organizations with a mature zero-trust approach.1 It’s no wonder that 69% of organizations believe that there will be a rise in cyber spending in 2022 compared to 55% in 2021, and more than 25% expect double-digit growth in cyber budgets in 2022.2 With cyberattacks surging due to widespread remote work and increased online interactions during the pandemic, it seems likely that this trend will only continue to grow further.

About 85% of breaches involved a human element in 2021. Additionally, 36% of breaches involved phishing attacks while ransomware attacks contributed to 10% of attacks.3 Amid such an evolving threat landscape, your top-most priority should be ensuring an advanced layer of cybersecurity that can protect your organization from malicious actors.

Building a strong defense is not easy since cybersecurity is not a one-and-done exercise. Your business may be safe now but could be unsafe the very next minute. Securing your business’ mission-critical data necessitates an unwavering commitment over a lengthy period. While there are several pieces to this puzzle, the most important one is ongoing risk management.

In this blog, we will walk you through cybersecurity risk assessment. By the end of it, we hope you will realize how installing cybersecurity solutions alone isn’t enough to counter cyberattacks unless you make ongoing risk management an operational standard for your business.

Understanding cybersecurity risk assessment

In rudimentary terms, cybersecurity risk assessment refers to the act of understanding, managing, controlling and mitigating cybersecurity risks across your business’ infrastructure.

In its Cybersecurity Framework (CSF), the National Institute of Standards and Technology (NIST) states that the purpose of cybersecurity risk assessments is to “identify, estimate and prioritize risk to organizational operations, assets, individuals, other organizations and the nation, resulting from the operation and use of information systems.”

The primary purpose of a cybersecurity risk assessment is to help key decision-makers tackle prevalent and imminent risks. Ideally, an assessment must answer the following questions:

• What are your business’ key IT assets?
• What type of data breach would have a major impact on your business?
• What are the relevant threats to your business and its sources?
• What are the internal and external security vulnerabilities?
• What would be the impact if any of the vulnerabilities were exploited?
• What is the probability of a vulnerability being exploited?
• What cyberattacks or security threats could impact your business’ ability to function?

The answers to these questions will help you keep track of security risks and mitigate them before disaster strikes. Now, imagine periodically having the answers to these questions whenever you sit down to make key business decisions. If you’re wondering how it would benefit you, keep reading.

Why make ongoing risk management a standard practice?

Making ongoing risk management an operational standard is vital, especially in today’s cyberthreat landscape where even a single threat cannot be underestimated. In one study, 30% of respondents say that real-time threat intelligence is critical for their cyber risk management.2 In one assessment, your business might seem on the right track but in the next one, you might spot vulnerabilities that can expose your business network to bad actors. That’s precisely why having an ongoing risk management strategy is now an integral part of standard operations for every business.

Most organizations lack the capacity to transform data into insights for cyber risk assessment, threat modeling, scenario creation and predictive analysis. This underutilization of data is one of the major roadblocks to making ongoing risk management an operational standard for businesses.

Here are seven reasons why you just can’t keep this key business decision on the backburner anymore:

Reason 1: Keeping threats at bay
An ongoing risk management strategy will help you keep threats, both prevalent and imminent, at a safe distance from your business.

Reason 2: Prevent data loss
Theft or loss of business-critical data can set your business back a long way, and your customers might turn to your competitors. Ongoing risk management can help you remain vigilant of any possible attempts at compromising your business data.

Reason 3: Enhanced operational efficiency and reduced workforce frustration
As a business owner or key decision-maker of your organization, you would be amazed how consistently staying on top of potential cybersecurity threats can reduce the risk of unplanned downtime. The assurance that hard work will not vanish into thin air will surely keep the morale of your employees high, thereby reflecting positively on their productivity.

Reason 4: Reduction of long-term costs

Identifying potential vulnerabilities and mitigating them in time can help you prevent or reduce security incidents, which in turn can save your business a significant amount of money and/or potential reputational damage.

Reason 5: One assessment will set the right tone
You must not assume that there should only be one fixed template for all your future cybersecurity risk assessments. However, to update them continuously, you need to conduct one in the first place. Hence, the first few assessments will set the right tone for future assessments as part of your ongoing risk management strategy.

Reason 6: Improved organizational knowledge
Knowing security vulnerabilities across the business will help you keep a keen eye on important aspects that your business must improve on.

Reason 7: Avoid regulatory compliance issues
By ensuring that you put up a formidable defense against cyberthreats, you will automatically avoid hassles with respect to complying with regulatory standards such as HIPAA, GDPR, PCI-DSS, etc.

Choose the right partner

Get the right partner to help you gauge every single cybersecurity risk your business is exposed to and protect your business continuously for a prolonged period. Contact us to learn how we can help you mitigate cybersecurity concerns with regular risk assessments.

1Cost of a Data Breach Report, 2021
2Global Digital Trust Insights Survey, 2022
3Data Breach Investigations Report, 2021

Rapid technological advancement and rising global connectivity are reshaping the way the world is functioning. From higher productivity to improved customer satisfaction, technology has played a critical role in the growth of businesses across the world. However, the consequential bad news is that technological advancements have also made organizations increasingly vulnerable to digital risks. However, this does not mean that businesses must compromise on growth and advancement for the sake of security. 

Organizations that understand how to detect threats and include preventative security measures and controls, as well as proactive solutions and thorough strategies, may better meet the security problems they face in modern digital environments. Let’s discuss the different types of digital risks you should be looking out for and how you can use this information to get positive ROI.

Types of digital risks

Digital risks are increasing in the business world due to the rapid adoption of new disruptive technologies. These risks are seen in various industries and are more pervasive than cybersecurity risks. On a broader scale, digital risks can be classified into physical, technical and administrative risks. 

The following risks are the most prevalent in today’s digital world and should be treated as top priorities to mitigate for your business:

• Cybersecurity risk: Cyberattacks continue to evolve as businesses become more technology driven. Attacks like ransomware, DDoS, etc., can disrupt the normalcy of any business.
• Data privacy risk: As we move forward to a knowledge-based economy, data has become the most valuable commodity in the world. This has resulted in hackers targeting critical business data and misusing it for personal gain.
• Compliance risk: Businesses need to adhere to various regulations regarding data privacy, cybersecurity, organizational standards of practice, etc. Any violation can attract heavy fines and penalties for a business.
• Third-party risk: When you outsource certain services to third parties, it might compromise the security of your IT infrastructure. For instance, a software tool you develop with an external vendor may introduce some vulnerabilities to your otherwise intact digital environment.
• Resiliency risk: This concerns the ability of a business to bounce back and continue operations after an unexpected disaster.
• Risks due to human errors: In 2021, 85% of data breaches involved some human element.^* Whether it’s falling for phishing scams, credential stuffing or misusing work devices, human errors can be quite costly for organizations if they go unchecked.
• Automation risks: While automation is reshaping the tech industry for the better, it could also give rise to a range of risks such as compatibility risks, governance risks and more.
• Cloud storage risks: The flexibility, ease of use and affordability offered by the cloud make it one of the most popular options for backup and storage. However, the cloud is also prone to various risks such as lack of control over data, data leakage, data privacy, shared servers and more.

Why risk assessment is critical in managing digital risks

The best way to start managing your digital risks is by performing comprehensive security risk assessments regularly. After all, how would you know what your current vulnerabilities or gaps are and where your biggest security challenges lie without an “under the skin” examination? 

With a risk assessment, you can measure your security posture against various internal and digital threats and determine how equipped you are to deal with these risks. When you perform a security risk assessment you can proactively:

• Identify vulnerabilities: A risk assessment helps you identify which part of your digital environment is relatively weak against various security threats. You can identify which systems are likely to be targeted by attackers and incorporate measures to strengthen these systems. Without the information presented by your risk assessment report, you don’t stand much chance of improving your digital security posture against various vulnerabilities.
• Review and bolster security controls: In most cases, security incidents occur due to a lack of controls in the process. For instance, without proper cybersecurity awareness training and best practices training, employees are unlikely to follow security protocols on their own, which could result in losses due to human errors. Based on the risk assessment, you can upgrade your securities and incorporate preventive measures against various risks.
• Track and quantify risks: To effectively manage various risks, you need to know their effect on your business. With a risk assessment, you can quantify these risks by identifying the potential losses posed by various threats. This helps you incorporate necessary risk-mitigation strategies to prevent exposure.

The value of risk assessment

IT and security budgets are often difficult to explain to management. Everyone understands the consequences of not investing in the correct security measures. However, it isn’t that easy or simple to put an exact ROI figure on security investments. The value of risk assessment is based on how you choose to act with the information you get from these reports.

In this scenario, the real question is – what is the cost of not making this investment? Let us consider a major data breach for example. It is always about what you stand to lose in the aftermath of a breach. If your business is dealing with valuable customer data, a data breach can result in unrecoverable financial losses as well as reputational damage. Moreover, this might also result in regulatory non-compliance and attract heavy penalties from various regulators. In such cases, reviving a business after a major disaster can be almost impossible.

Here, the cost of investment in security solutions and cyber insurance is negligible since it concerns the survival of the business. You may not be able to measure the exact ROI of the airbags in your car but that does not mean that your survival is not dependent on them. Similarly, the information and insights gained from routine risk analyses are critical to the operation, resilience posture and long-term success of your business.

Assess your risks the right way

Monitoring and managing your digital security risks is a continuous process that must be done regularly and should be a part of your ongoing operational strategy. 

Contact us today to perform a complete risk assessment of your digital infrastructure to help you build a resilient security posture against various threats.

^*2021 Data Breach Investigations Report

Information Contract Requisitions Need:

Purchase requisitions differ from each business but most commonly demand certain necessary data:

• Department requesting 
• Classification and quantity of items requested
• Proposed cost of items purchased
• Vendors name

Approver or the one who Denies a Contract Requisition Order:

Ir will be the purchasing department who will approve or deny the contract requisition. While businesses depend on making purchases, smaller purchases are often bought directly from retailers using a company credit card, eliminating the purchasing department’s requisitioning.

When do you need a Contract Requisition Orders:

Conventional procedures of many businesses demand a purchase requisition when a purchase amount is expected to exceed. 

Only after the purchase requisition has been approve that a purchase order is sent to the vendor.

Information included on a Purchase Requisition:

Like purchase requisitions, purchase orders depends from business to business but usually demand some necessary details:

• Purchasing office name
• Classification and quantity of items requested
• Ship to address
• Terms of payment and instructions of invoice
• Purchase Order number

A purchase requisition number usually has the same number as the purchase order to support recording purposes. A purchase order is deemed an agreement between the vendor and the buyer once the vendor accepts it. A purchase order is transmitted to an outside vendor most of the time, and at times it may be used internally.

When a department wants to purchase an item within the organization’s other department, many ask for an interdepartmental purchase order presented by the purchasing department. Substantial businesses with separate operating budgets, interdepartmental purchase orders can be beneficial for accounting purposes.

Why a Contract and Purchase Requisitions need to be Evaluated?

The vendor must review all numbers, quantities, and terms of the purchase order. It then becomes reasonable to negotiate the terms and conditions needed before receiving the purchase order or agreement. Retainage is a part of the total cost withheld when all obligations are met. Any retainage needs to be discussed and considered before taking the contract. 

When received, both participants should review the contract to guarantee that the terms and obligations are clear. This is notably essential if there were discussions made before approval.

Most contracts involve tremendous details, but in evaluating the primary contract, some essential items should be part of and analyzed to guarantee that both parties meet the terms:

• Ensure accuracy by reviewing the items, quantities, and terms
• Evaluate the agreed price and retainage
• Verify terms of pricing to clarify specific details, such as settled damages and charges for permits
• Validate schedule terms to explain specific information, like weekend, holiday, evening work, weather delays, etc.
• Payment terms should display when the final payment is processed.

The contract’s entirety should be reviewed and sifted through, but the list discussed are essential to review upon taking the contract. A well-written contract that both parties understand can help reduce future challenges once the contract started.

Benefits of P2P

• Let’s you receive ordered items to multiple locations.
• Saves receiving addresses in systems. 
• Transfer alternate receiving addresses to your purchase orders with ease.
• Eliminate wrong address delivery.
• Freight, installation, handling, or other miscellaneous charges applied on a purchase order.
• Itemize and tracking of miscellaneous charges.
• Model fixed or percentage-based miscellaneous charges.
• Accurate and automatic miscellaneous charges application to purchase orders.
• External and Internal receiving notes on purchase documentation.
• The external and internal receiving notes are maintained in a stand-alone system.
• Eliminate errors due to miscommunications on handling requirements.
• Saves time accessing the correct purchasing documentation for a given purchase order.
• Ease in creating repeat orders for your vendors.
• It lets you copy your existing purchase orders to create new ones.
• Eliminates entry errors of complex orders with multiple purchase order lines.
• It eliminates manual entry of similar purchase orders manually.
• It gives guidelines for minimum, multiple, or maximum purchase order quantities.
• Let you define minimum, multiple, maximum, and standard purchase quantities at an item level.
• Automatically check and correct the purchase order quantities during order placement.
• It does not cause order quantities inefficiencies in internal operations when there are irregular purchases.
• Purchase and stock items in different units of measure.
• Lets you use various units of measurement for different purchase orders for the same item.
• Automatically convert the unit purchase price based on the purchase unit of measure.
• Create duplicate units of measures records to model item-level conversions.
• Saves time converting to different units of measure during order placement.
• Allows purchase prices change for different vendor groups.
• Allow purchase price agreements with your vendors for certain items.
• Allow purchase price agreements to change by date, purchase volume, or currency.
• Automatically apply the right purchase price based on purchase price agreements during order placement.
• Accept vendors different discount levels.
• Allow discount agreements with your vendors for certain purchased items.
• Allow purchase discount agreements to change by date, sales volume, and currency.
• Automatically apply the right discounts based on purchase discount agreements during order capture.
• Prevent vendors from charging you an incorrect purchase price.
• Prevent vendors from offering you the wrong purchase discounts on your purchase orders. 

Generate requisitions

After the blueprints/TOR/SOW has been finalize, create a purchase requisition. A requester sends the filled-out purchase requisition form after meeting all essential administrative requirements. 

Purchase requisition approval

Department heads or procurement officers then review submitted purchase requisitions. It may be approved or rejected after evaluating the need, checking the available budget, and confirming the purchase requisition form. If incomplete, it is sent back to the requestor to correct and resubmit.

Generate a PO

Purchase orders are created after the approval of purchase requisitions.

Approved purchase order 

Purchase orders will be sent to be approved to guarantee the correctness of blueprints. After it gets approved, it will be dispatched to vendors. 

Receipt

After the product gets delivered, the buyer checks the items or services and make sure that it complies with the terms.

Supplier performance

After the receipt process, several circumstances like quality, speedy delivery, responsiveness, service, agreement compliance, Total Cost of Ownership (TCO). Negligence is flagged in existing records and data systems for future use.

Invoice

When a receipt is approved, including the purchase order, the vendor invoice, and the receipt of the goods. If there are no errors found, an invoice will be approved and transmitted to the finance team for payment expense. In the case of mistakes, the invoice is sent back to the vendor with a reason why its rejected.

Payment

When an approved invoice is received, the finance team will process payments according to the agreement terms. Payment made falls into any of the following category:

• advance
• partial
• progress or installment
• final
• holdback/retention payments.

Reduce the time spent on redundant or incorrect information. Improve your client satisfaction and increase your cash flow with our OTC specialists. One client saw their average order processing time go from 43 minutes to a mere 11 seconds after consulting with our OTC experts.

What is Sales Order Processing?

Sales order processing is a series of actions that a business uses to fulfill a customer purchase. Today, sales order processing is often supported by technology, which warrants each contact on the seller’s side (from billing to production and logistics) has the needed information to accomplish a customer order efficiently.

Clicking “buy” on a website or calling in an order initiates a complex chain of interactions that involves different departments. Despite the complexity of the process and bulk of orders that a seller handles, customers expect their purchases to be delivered fast.
To thoroughly understand sales order processing, we need to look at the sales order itself, its purpose, and its relationship to other order documents.

What is a Sales Order?

A sales order is an explicit agreement between seller and buyer concerning the delivery of items or the supply of services. 

Having a timely delivered sales order makes you reliable in the market. It is your primary responsibility to customers to deliver orders on time. Also, the delivery process should be trouble-free, making it an overwhelming experience for customers doing business again with you.
The sales order validates the terms of a business between a buyer and a seller. The seller produces the request, in response to a purchase order. The seller may send this document to the customer or use it only for internal use. The sales order covers the quantity, price, delivery time frame, and more.

Download Now

A sales order application system comprises the procedures involved in accepting and shipping customer orders and preparing invoices that describe products, services, and assessments. The sales order is the interface between the various functions necessary to process a customer order. These functions are sales order, credit, finished goods, shipping, billing, accounts receivable, and General ledger.

Sales Order

The sales order function initiates the processing of customer orders with the preparation of a sales order. The sales order contains descriptions of products ordered, their prices, and descriptive data concerning the customer, such as name, shipping address, and, if necessary, billing address. At this point, the actual quantities shipped and freight charges (if any) is not known. The seller will prepare the invoice once the goods are sent, and a notice has been forwarded to billing. Because the invoice is prepared after shipping, separate order and billing is also called post billing.

Credit.

A customer’s credit standing should be verified before the shipment of goods. For regular customers, the credit check involves determining that the total amount of credit granted does not exceed management’s general or specific authorization. For new customers, a credit check is necessary to establish the terms of sale to the customer. The sales order function should be subject to the control of an independent credit function to maintain the separation of duties.

Once credit has been approved, the sales order function distributes the sales order set. One copy of each sales order is forwarded to billing. These are filed as open orders, allowing the billing function to anticipate the receipt of matching shipping advice from the shipping function. One copy – usually called the packing slip copy – is forwarded to shipping. This copy authorizes shipping to receive goods from finished goods for shipping. Another copy – traditionally called the stock copy – is forwarded to finished goods. This copy allows finished goods to release goods from its custody for shipment to customers.

In some cases, a customer’s order may require that a production order be issued to produce the goods because they are not in stock. Such situations arise when the order is for a unique non-stock item. They also may appear as standard company practice due to either the customized nature of the product or a short production cycle that alleviates the need for an inventory of finished goods. Such situations also occur when items are out – of- stock and must be back-ordered. Suppose the time between receiving the order and the actual shipment of the order is significant. An acknowledgment copy of the sales order may be sent to the customer to notify the customer of their order received and processed.

Finished Goods

Finished goods pick the order as described on the sales order’s stock copy (copy 3). Stock records are updated to reflect the actual quantities to be forwarded to shipping. Actual amounts are noted on the sales order’s stock copy, which is then forwarded along with shipping goods. Shipping should sign the stock copy to acknowledge receipt of the quantities noted thereon from finished goods.

Shipping

Shipping accepts the order for shipment after matching the packing slip copy to the sales order’s stock copy. Shipping documentation is prepared according to the situation. Frequently this requires the preparation of a Bill of lading. A bill of lading is the documentation exchanged between a shipper and a carrier like a trucking company. The bill of lading documents freight charges and the transfer of goods from the shipping company to the transportation company. Frequently, freight charges are paid by the shipper but billed to the customer on the sales invoice. The packing slip copy of the sales order is usually included with the customer’s order when it is shipped.

Billing

The shipping department forwards shipment documentation to the billing function. This documentation is termed the shipping advice and is usually the stock copy of the sales order and a copy of the bill of lading. Billing pulls the related open order documentation, verifies the order, then prepares the invoice by extending the charges for actual quantities shipped, freight charges (if any), and taxes (if any). Invoices are mailed to customers. Invoices are posted in a sales journal, and posting copies are sent to accounts receivable. Periodically, a journal voucher is prepared and forwarded to the general ledger function for posting to the general ledger.

Accounts Receivable and General Ledger

The distinction between billing and accounts receivable is vital to maintain the separation of functions. Billing is responsible for invoicing individual sales transactions, and accounts receivable maintains customer- accounts information and sends periodic statements of account to customers. Billing does not have access to financial records (the receivables ledger), and the financial records are independent of the invoicing operation. Note that the control total of postings to the accounts receivable ledger sent to the general ledger by accounts receivable is compared to the general voucher sent from billing to validate postings to the general ledger. In the same practice, the distinction between shipping and finished goods is essential to establishing the accountability for the release of finished goods from Inventory.

Types of Sales Order Systems

Various relationships between the order, billing, and shipping functions are feasible, depending on the circumstances—the primary consideration in preparing the invoice. In a complete pre-billing system, the complete invoice is prepared simultaneously with the shipping order. In this case, the shipping order is usually a copy of the invoice. This system minimizes paperwork. The invoice is released after the goods are shipped. A complete pre-billing system requires all invoicing information to be known before preparing the invoice/shipping order set. This requires few back orders or other Inventory problems. Also, freight and additional charges must be either absorbed by the seller or standardized (e.g., add 50 cents for postage). Any change between the customer order as prewritten and as actually shipped requires a new invoice and the original invoice’s destruction. If such situations are constant, complete pre-billing is very inefficient. 

In a separate order and billing system, the shipping order is prepared separately from the invoice. The invoice is scheduled after the goods have been prepared for shipment. A separate order and billing system is necessary when there is a significant difference between the information on the shipping order (internal to the seller) and the invoice. For example, technical specifications in the shipping order may not be required or desired on the invoice. Excessive backorder and out-of-stock conditions also warrant this approach because the invoice’s final content cannot be determined until the goods are ready for shipment. In many industries, alterations and substitutions of goods ordered are allowed by customary trade practices. In retailing, for example, different styles or colors may be substituted in an order for clothing. The changed specifications from the customer’s order must be shown on the invoice. In other instances, several shipments are made to the same customer over a specific period under a single blanket order. That being said, there is no one-to-one correspondence between the customer order and the subsequent invoices. Typically one blanket order requires several separate invoices – one for each shipment made under the blanket order.

Incomplete prebilling is a third type of sales order system. The incomplete prebilling system is very similar to a separate order and billing system. The distinction is that the invoice is originally prepared by the sales order department rather than a sales order. The invoice is completed to the extent possible, but because actual quantities shipped and freight charges (if any) cannot be known with certainty until shipment, the invoice is incomplete. This invoice is then distributed in the same fashion as the sales order in a separate order and billing system – with copies to finished goods, shipping, and billing- except that multiple copies of the invoice are sent to billing. When billing receives notification of shipment, it pulls its copies of the invoice and completes them. In separate order and billing, billing separates the original copy of the invoice when it receives shipment notification.

Both separate order and billing and incomplete billing are post billing systems. Incomplete billing is commonly used in manual systems, as only one document (an invoice) rather than two documents (a sales order and an invoice) must be prepared. This reduces the transcript of information and thus is often more efficient in a manual system.

Note that the sales order is primarily an internal document. On the other hand, the invoice is the customer’s formal notification of the shipment amount. Note also that the term “invoice” and “bill” can be used interchangeably. A bill of lading is an invoice for freight charges. Separate order and billing might also be called separate order and invoicing.

Inventory generally signifies a large portion of your assets, if not the biggest. If your business handles any inventory, then your Inventory Management system’s abilities can efficiently make or break your business. In a retail environment, a company must purchase, store, and then sell items to customers. You may never lay hands on the products due to handling or drop shipping in a distribution company. Your inventory may only be made up of the items you purchase as raw materials in a manufacturing environment.

Minimizing investment in inventory while maximizing profit is a goal for any competitive industry, such as retail. So, suppose your bottom line is based on measured inventory costs. In that case, inventory management could dramatically influence where your company really is financially versus the numbers you might be measuring for your inventory stages.  Below are 10 strategies to excellent inventory management that would improve your business to mature or remain productive.  

#1: What is the Price of Your Inventory Right Now?  

To have access to the price of your inventory at any point gives your business the capability to efficiently plan and assess your financial position. In some cases, a business’ setup can regularly settle the inventory value; otherwise, a physical count is necessary for complete accuracy. Although the cost of your inventory is the foundation of profitability for your company.  

Obviously, there are dozens of business-operating expenses, but knowing your inventory value is crucial for determining your pricing and profitability. Without an Inventory Management System, your best bet would be to study your inventory account balance. However, this option’s problem is that it may not accurately reflect inventory items but aren’t recorded in the books yet. For example,  you may have acquired or sold items that have not been invoiced and, therefore, not previously registered. What is required is an Inventory Management system that provides you with inventory costing method options, such as LIFO, FIFO, weighted cost, and standard cost. Depending on which cost method you use will directly impact your balance sheet, income statement, and cash flow differently. It is essential to tell what they are.  

#2: What Valuation Method are You Using?  

It is important to understand your valuation method because it can impact profit margins and your income statement based on which method you are using. The valuation methods available, for example, are First in First Out (FIFO), Last in First Out (LIFO), Weighted Average, and Standard Cost.  

FIFO is an approach in which inventory tracking and costs assume the first items purchased are the first items sold. This matches inventory flow, similar to what you would expect in a retail establishment. New items would be placed behind the existing items on a shelf, so, in theory, the oldest items would be the next sold. Of course, even if the actual inventory flow does not match this, the cost and valuation will follow this pattern. As a result, prices recorded on sales will be based on the oldest and most likely lowest items. The current valuation will always be found on the value of the most recent costs. In this case, the result is that the items’ prices will be lower, and the result is higher recorded profit and taxes.  

LIFO is an approach in which the tracking of inventory and costs assumes that the last items purchased are the first items sold. This flow would be less common in practice because it would be as if a business always purchased the newest items on the front of a shelf. The items on the back of the shelf could be much older. Regardless, the costs of items sold will be based on the most recent items purchased. The value of inventory will be based on the oldest items. In this case, the outcome is that the items’ cost will be higher and lower recorded profit and lower taxes.  

Average cost creates an average based on the price of all inventory items. It takes the approach that the current cost most accurately reflects all items’ costs by using an average cost. This method is most effective with a computer system that can track and update expenses as soon as items are received. This method will impact the resulting profitability and inventory valuation. Still, the results will vary depending on whether items increased costs over time, by how frequently the items were purchased, and so forth.  

Standard cost uses a fixed cost entered manually for an item. Any variation with the actual cost is recorded in a variance account. This method’s advantage is that the user has more control over the costing being used. It can prevent valuation changes that are not wanted or don’t match the business environment. However, in many businesses, the inability to efficiently update the cost for items could easily make this method useless.  

Overall any business may have good reason to use any of the valuation methods described above to meet the needs and objectives or requirements of their business. The main point to remember is that the technique used can impact your profits and inventory value. Having a good management system is essential to effectively understand how these impact your accounting to make intelligent business decisions based on reality, not based on variance resulting from valuation methods.

#3: Where is Your Cash?  

Inventory is a liquid asset that heavily influences cash balances. Most businesses are careful about monitoring their cash and keeping track of how much they have. However, businesses that simply rely on their balance statements from the bank to assess their cash flow put themselves at risk if they carry large amounts of inventory. For example, you may know your assets’ value in stock, but do you know how much of it you have paid in full? Do you know how many customers have been sold items from inventory that have not yet paid you? The answers to these questions can dramatically impact your cash situation and your bank statements.  

A bank statement might show that you are selling, and from all appearances, your business is healthy. However, when bills come due, you might find all your cash tied up in inventory; a large number of profitable companies end up going out of business due to this. With an adequate Inventory Management System, you can establish the necessary tracking and controls you need to avoid this from happening.  

One solution is to integrate a purchase order process that tracks any inventory purchase order as soon as it is authorized. Use this information to evaluate how much cash you’ll need to pay for the purchases when they come due. Besides, you can better track when items are received and placed in inventory. Although you may not get an invoice until all items are accepted, you can record their value based on the order as they come in.

A good inventory tracking system can immediately and accurately reflect sales to see what revenue you generate and the items sold. Also, this information can be reviewed to estimate when you can expect to receive payment.  

Similarly, suppose a business has a more significant amount of cash-on-hand. In that case, they could cover bills and remain in business, even if the revenue didn’t come in on time, regardless of having the ability to track your inventory sales revenue. Payment for the inventory or what you may pay out in inventory is critical in determining your business’ actual cash balance.

#4: What is Your Profit Margin?  

You may know your business’s profit, but at what level of detail can you break down where this profit comes from? If your company bases profit mostly against the cost of inventory, the ability to track and know your inventory’s value becomes critical. Also, it’s difficult for any business with more than a handful of inventory items flowing through their business or being used for raw materials to see where your profit margin comes from.  

A useful sales profit report makes it possible to study your business virtually. See precisely where your profit is coming from and evaluate how profit margin percent translates to actual profit. For example, how much actual cash does an item with a 40% profit margin bring in compared to another item currently making 20%?  

Also, a report that allows you to break down profit by: department, customer,  customer type, product type, vendor, location, salesperson, and many other options is essential in whatever way you need to see it. Having the ability to drill down to where your profit margin is coming from helps you evaluate what areas to focus on. Look for ways to improve profit or track how changes in your business are resulting in net profits.

#5: Do You Know How Turnover Can Change Your Profit Margin?   

Imagine you have two existing products, product A and product B. You need to drop one of them to make room for new product C. The decision would be based on which current product was generating the most revenue. However, what if product A was causing a gross margin of 40% but product B only 20%, which product would you drop? Product B, right?  

If you decide just based on the gross profit alone, you may be dropping the more profitable product. The rate of turnover can change the scenario. Even at a  lower profit margin, product B may be a much more profitable product if the turnover is higher than product A. For example, if both products retail at $100, then each time product A is sold, you have made $40 of gross profit, and each time product B is sold, you earn $20 of gross profit. In a single month, if 2 of product B are sold and only one of product A then they each have generated $40. However, suppose three or more product B is sold for every product A. In that case, product B generates more money and a better profit or revenue for your business. It should be kept despite product A’s higher profit margin.  

The size and space a product takes up is also a factor. If you have limited space, you may determine to keep product B only because it takes up less floor space. However, product A may be a more profitable product, but it takes more room. This is often evaluated in detail by looking at the gross margin per square foot of retail space. Comprehensive reports can provide the information you need to assess your items’ actual profit and cost. To help provide more useful and accurate information that allows you to make the best business decisions. Profit-margin reports that can reference the gross margin with the dollars generated. It can help avoid overlooking low margin products that produce a high dollar amount due to turnover

#6: Do Changing Costs Go Unnoticed?  

The details of how costing changes affect your business may vary widely. Still, if inventory is a large part of your business, these changes will have an impact. The simplified bottom line is that the company’s selling price should be high enough to cover all costs and produce a profit. As a  result, any changes to the cost structure can impact profit. In the case of inventory, this profit will change whenever the cost of an inventory item varies. In many cases, the sale price may be set up to absorb any changes in value. Still, suppose costs change and sale pricing isn’t updated soon enough. In that case, you may be missing out on potential profits or even losing money.  

If the sale price is a margin of your items’ cost, a good inventory management system will automatically adjust the sale price. You can always be assured that you are getting the profit you want when an item is sold. However, it is not practical to have the sale price shift freely at the cost of a product. When cost shiftings are common but don’t indicate an overall increase in costs that require a price increase. Alternatively, in a cost-sensitive market or business, a change in the sale price may have a dramatic impact on sales. So management may need to consider any pricing changes carefully.  

In this case, it would be possible for a cost to increase and to have items sold. Before the change is noticed, or before management has the opportunity to review the pricing and adjust it accordingly. Do you know if your costs have increased? Or how the inventory costs might be impacting sales prices and profit margin? If not, you may want to consider investing in a more robust Inventory  Management system.  

If that’s the case, you would want a purchase order module comparing the cost of items received with the items already in inventory. A report shows the change and shows the impact on your sale price and profit margin should be issued if the price changes. This helps make sure inventory costs are addressed immediately, if needed, to avoid any loss in profit.

#7: How Sophisticated is Your Pricing?  

Having the ability to set up and automate pricing can be priceless. It may only be possible if Inventory Management is used. In fact, without a good Inventory  Management system integrated to your point of sale or order entry, it is likely that the sheer logistics of communicating and managing complex pricing limit your options.  

A good Inventory Management system can accurately track the cost of the items you are selling or using as raw materials. Make it possible to set promotional prices temporarily for a sale or some other campaign. You can also have the system identify your customers and automatically adjust pricing accordingly. This is useful for businesses with wholesale and retail pricing or contracts. A particular customer is allowed to set pricing based on a deal.  

What you should look for is software that provides numerous pricing structures and methods with the ability to maximize your profit without involving salespeople or clerks. This saves you time, labor, and errors because all pricing changes are made behind the scenes without mistakes. All the clerks need do is enter the item in the register.  

In the end, a powerfully built system makes it possible to see the result of your pricing methods, evaluate their success, and improve pricing to maximize earnings.  

What pricing structure do you have in place? Are you leaving profit on the table? Are you restricted by your ability to incorporate more complex pricing efficiently?

#8: Can You Identify Trends?  

No matter what business you are in, there will be some fluctuation in sales and, as a  result, the movement of items in your inventory. In some businesses, these changes can be fast and furious, and in some, it may be a slow process over the years. Regardless, how do you identify trends and differentiate them from long term changes in sale patterns?  

A failure to effectively track trends can end up overstocking items that never move or require heavy discounting in some situations. You may lose business to competitors or spend high costs to get the items needed to meet demand in another scenario. Any company that can point out the trends early can have the higher ground. Take advantage of these trends by giving out in-demand items and discarding those that no longer interest them. With the “big box” stores, it is often critical that a smaller store do a better job managing customer tastes and needs to stay competitive when pricing is not an option.  

So how do you accomplish this? How do you identify sales trends in a timely and useful manner? A tightly-integrated software with purchase order, sales, and inventory modules can track inventory movement details from receiving to the sale in detail. Produce a report that provides detailed information about the direction of your inventory items over 12 months.

#9: Can You Automate Ordering?  

If your business has a lot of inventory, regularly ordering and purchasing those items must be addressed. To do this effectively, one needs a  purchaser who can spend time analyzing sales, monitoring inventory levels, and making orders to keep items in stock for customers. While any business’s specific needs vary widely, inventory management can likely be dramatically improved with computer-assisted ordering.  

Overall the key to this is the ability to take advantage of an integrated system that makes it possible to streamline purchasing by automating it. This not only frees up time to focus on other aspects of your business, but it prevents errors and the potential for overlooking needs. It automatically generates orders based on the actual Inventory levels.  

So how much time could you save by automating your orders? How many times have customer’s needs gone unfilled because stock on some items was low? Look for an excellent integrated Inventory Management system that can make all these problems go away and give you a competitive advantage by streamlining your order process.  

There are systems where purchase order, sales, and inventory are integrated and work seamlessly together — strategies that can set up minimum and maximum quantities for an item. When that item runs low, the system automatically generates an order based on those numbers and current inventory levels. There are even good systems that can generate orders based on ‘the least expensive vendor.’ To get the best deal possible for your needs and business, you can establish other criteria.

While there may always be a need for careful ordering and review, an option to automate the ordering and fulfillment of the staple items is beneficial. It frees up your time so that you can focus on the areas in inventory and purchasing that require greater attention.

#10: Do You Know Where Your Vendors Are?  

Who are your vendors? How many vendors have you purchased your inventory items from? Are they late delivering orders? If so, how often? Do quoted prices differ from prices listed on an invoice? These are all questions you may have about your vendors. Based on your business and business needs—delivery timeliness,  availability of items, and service—may vary in importance. For example, you may be more interested in a timely and quick supply of items or want the lowest price. You can handle late shipments or poor service, or you may be somewhere in the middle, or you may have some items you need shipped on time and others you don’t.  

Managing your vendors and tracking what they provide and how they meet your needs is critical to your business. In many industries cultivating good relationships with vendors often provides a competitive advantage that can make your business excel. With an excellent integrated system, you can collect and gather the information you need to make the right decisions about your vendors. With a complete, integrated Inventory Management system, you can provide your Vendor information to help them better serve you. 

The Software Solution  

Proper management of your business’ inventory starts and ends with a customizable, robust, fully-integrated software setup where output reports information you need to see daily. 

Unlike software that merely interfaces, our programs are truly integrated. A change made in one aspect of the system (a sold item, for example) is automatically reflected in every other system’s other facet. You never have to enter the same information twice and always know your business’ numbers are up-to-the-second and accurate.  

We have a myriad of tools and features that comes with each of our packages. It’s the amount of information available in our reports (and the fact that they are customizable) that has been the subject of praise from our customers since the beginning. We provide multiple report options from within the inventory, sales, and purchase order modules. Since we are tightly integrated, business owners and managers can track details about Inventory movement from receiving to the sale.

According to zdnet.com, the switch to businesses using remote employees has changed the hacking landscape. In 2020, up to 20% of all cybersecurity attacks were aimed at the new remote workforce. With employees and companies learning how to shift into going remote, hackers knew this weak-link was ripe for the picking.

Cyberwarfare is the battlefield of the 21st century and beyond. There are three common types of entities that create most hacks. Let’s discuss these entities, their motivations, a few of the biggest ones that happened this year, and what we can learn from the nature of those hacks.

The Forces of Evil

Simplifying things, there are basically three types of hacking profiles that are likely to engage in these nasty hacks. What most people think of first are criminals and ne’er-do-wells looking to profit from this inexcusable behavior. Money motivates them to steal credit card information or sensitive personal information. Then they sell it to sketchy third parties. On a global scale, foreign powers can, will, and have engaged in destructive hacks to disrupt economies. Often politically motivated, these crooks hope to instill unrest and frighten civilians.

Finally, some hackers just think they’re smarter than everyone else. They breach security systems because they enjoy causing chaos. Some of these hackers insist they’re working for a good cause. They focus on blowing the whistle on government projects they feel are wrong. But all too often these hacking attempts are completely random. Sometimes years of data and research is wiped out or stolen. They don’t seem like Robin Hood then!

Some of the biggest hacks in 2020

By studying past events we can learn a lot about protecting ourselves both in the corporate and private worlds. The most common attacks are usually through malware. Short for “malicious software,” malware is invasive software that finds a way into PCs and corrupts or destroys files and programs.

One victim of a malicious malware attack last year was Travelex. In January 2020, they lost an undisclosed amount of money. And an undisclosed number of private records were compromised due to the presence of malware. Everyone who has given them personal information, like credit card numbers, are now at risk.

Estee Lauder had over 440 million internal records exposed due to Middleware, and other security failures. Middleware, while not the same as malware, does add extra complications to systems. Middleware gets its name by hiding between the operating system and the applications on a PC. Hackers can then use middleware to delete, copy, or encrypt anything that passes through it.

Phishing, another hacking method, lead to damaging incidents with Virgin Media, Whisper, and Marriott throughout January, February and March. Using phishing tactics to learn password and login information, hackers gained access to countless records. Again, millions of innocent people are now at risk of credit card fraud, drained bank accounts, or identity theft.

What can we learn from this?

These are far from the only hacks. As you can see, no matter how secure we think we are, hackers can usually find a way in. Poor training and the lack of conscientiousness in user security are the biggest ways hackers gain access to information.

This results in things like ransomware attacks, data loss, and stolen files. These breaches can do serious damage to businesses and private citizens alike. Presently, despite great security measures, we still need stronger security in place on the corporate side. Better training is a necessity for employees. Middleware, which is often found by using Antivirus programs, needs to be eliminated whenever possible. Better walled gardens can be built and utilized by businesses that hold private records and data.

These attacks are unfortunate, but rather than being rueful to the victimized companies, we should demand that they learn from these mistakes. Hackers are not going to go away. You can count on them to find more and more ways to steal your data.

These major companies can afford the best cybersecurity defenses available. Yet, they are still vulnerable. If you don’t feel your cybersecurity is as strong and safe as it should be, please contact us anytime. As your Managed Service Provider, it is our job to make sure your precious data is as safe as possible.

You’re finally ready to purchase a BDR. You’ve done all the research, found a company you’re confident in, and are excited to finally have peace of mind. So now you start thinking about exactly what you need to back up. Is all of your data necessary or is some data less important? Most businesses want to back up everything because you never know when you’ll need it. But sometimes that is too cost-prohibitive.

The Three Types of Backup Solutions

There are three different kinds of backup solutions in today’s tech world: straight to cloud services, software-based products, and a hybrid approach that combines on-site hardware and software with the cloud. Depending on what kind of BDR you’ve purchased, you will first need to delegate what data is stored, is not stored, and how often. The amount of data you can back up and how easy it is to access will be affected based on the solution you chose. How you segment that data, how often it’s backed up, and how it’s backed up are questions you’ll need to answer. For example, all the data backed-up every time creating enormous file sizes, versus incremental backups that key-in on changes only. It’s not always necessary to back up everything daily, but there are some things you will want to consider before deciding on your needs.

What Kind of Data Should You Back Up?

Credit card transactions or receipts are very important. Your accounting software will keep an eye on this and automatically back up the data. You will also include invoicing, receivables, payroll, and anything that is financially related. All financials are incredibly important, even one lost invoice could hurt your business.

Next, protect all intellectual property. Unless you’re rocking an amazing vault to store a famous recipe like Coca-Cola or KFC, make sure you back up everything that brings you a competitive advantage in the marketplace. Anything with hackable data or items that can be compromised needs to be backed up daily as well.

You will also want to back up all client files. Not only is it invaluable to keep this information safe, but it would certainly affect your client’s confidence if anything was lost or stolen. Make sure you’re backing up your client and prospect lists (anything that you’re storing in your CRM, really). You spend a great deal of time developing your list for marketing purposes. Losing this information is why companies go out of business within six months of experiencing data loss.

Finally, you must back up all project management software. Anything your business uses to keep track of daily activities and work needs to be backed up. It’s also important to make sure you can maintain progress in the event of a data loss. Some businesses maintain a “paper trail” on project communication as an extra step.

Be Prepared for Any Kind of Disaster with the Right Backup Solution

Did you know that 140,000 hard drives crash in the USA every week? With that kind of number, it’s just a matter of time until it happens to you. That is not a comfortable position to be in if you don’t have a backup solution. Unfortunately, hard drive corruption is usually due to mechanical issues. Age and dust build-up can (and will) cause technology to fail. We’ve all used the old laptop we still have that’s been on its deathbed for months; freezing frequently, taking forever to load a webpage, and of course, acting as a heater for your lap. All of these things are signs leading to a crash. You may not care if it’s an old hand-me-down laptop, but you will care when all of your product data and client information is gone.

When it comes to BDR, you ideally want to back up every piece of data that you have. Sometimes, though, this is impossible based on the cost involved in maintaining that hefty data chain. At the bare minimum, keep these items in mind to find the backup solution that is right for your business. Contact us today to figure out what solution is the best fit for you.

The main purpose of Day End Processing (DEP) is to move a lot of processing away from data
entry.

You would use DEP to update your Inventory Control data, the transaction and audit data for Order Entry and Purchase Orders.

When you post Inventory Control transactions, the program always updates the affected item quantities in your system, so you always know what you have in stock.

Also, there is a certain order that DEP goes through when it is run, which is:

• Receipts both OE, IC and PO (DEP always looks to PO first to make sure there is nothing
received in inventory that hasn’t been costed yet.)
• Assemblies
• Transfers
• Adjustments
• Shipments

Also, reports (statistics, movement, valuation, etc.) are all updated during Day End Processing.

Note that if a shipment is posted, then a receipt is added after the shipment, but before Day End is processed, Day End will process the Receipt cost calculation first, then determine the Shipment Cost. When you do run DEP, it will show the true cost of that transaction.

And DEP is all about timing. If you have people entering receipts and Purchase Orders across the office and they are not talking to each other, you are going to have situations where you will have costs in Inventory Control that won’t make sense.

Which why it is important when you run DEP. Just because it is called Day End Processing, does not mean you have to do it at the end of the day. You can run DEP anytime and have it constantly running throughout the day. In fact, we suggest that you run DEP every time you run a transaction or when you do not need to use your computer for other tasks (for example,
overnight) because depending on your computer and the number of transactions entered since the last time DEP was run, it can take some time to complete. By always running DEP, you keep your Inventory Control audit trail and reports up to date Click this link to see the video that shows you Day End Processing in action:
https://youtu.be/k0E02kV-3tQ

1. Introduction to Avatax: Get an overview of each tab in AvaTax and your account’s basic setup.
   Set_up_AvaTax_Update
2. Schedule Returns: Set up the tax return forms’ filing frequency for each state your company files. Your scheduled returns give us the data needed to file on your behalf and show each scheduled filing detail.
   Schedule_returns
3. Manage your return schedule: The summary of your monthly tax activity and liability by state gives up-to-date financial data for analysis and reconciliation with your business application.
   Edit_your_scheduled_returns
4. Manage tax notices: A tax notice is an advice from a tax jurisdiction informing a tax account holder of a requirement, adjustment, or error concerning their tax account.
   Returns/Understanding_tax_notices

Read More about the process:
You’re_new_to_Returns_but_your_business_isn’t?origin=deflection

Read More