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Distribution Software And Overhead Costs: 3 Secrets To Savings

Posted by Steve Anderson

Apr 23, 2014

481415305Of all the ways to improve your business's profit margin, cutting overhead costs is among the most effective. Distribution software is a vital component of any wholesale and distribution management strategy, because it allows for automation to improve workflow, monitor operations and cut waste.

Overhead costs tend to remain relatively stable despite changes in the economy and market performance. While this predictability is great for strategic planning purposes, it's a trap of complacency for businesses in the wholesale and distribution industry: If it's not broken, don't fix it – right? Not necessarily. If you're not proactively trying to cut your overhead, you're likely spending far more in operational costs than you should be – and your bottom line is suffering.

Here are three important benefits of distribution software and how they help save you money on overhead costs.
  1. Superior Contract Management
    As a wholesale and distribution business owner, you know the importance of contract management. Juggling vendor, supplier and outsource contracts is a complicated administrative task that requires lots of staff time to complete. Plus, manual management is always open to human error.

    By using distribution software packages to automate contract management, you greatly reduce your overhead. You streamline administrative tasks and eliminate costly entry errors. Distribution software also offers you improved efficiency with a single, unified view of your contract management system.

  2. Proactive Approach
    Not only does distribution software cover the administrative aspect of contracts, but it also allows you to plan your budgets more accurately.

    All of your assets – equipment, tools, administrative supplies, vehicles, etc. – have a shelf life. You need to perform routine maintenance on these tools to reduce wear & tear and prolong their lifetimes.

    Tune-ups and repairs, however, are costly. If you're not proactively planning for these cyclical costs, your overhead costs fluctuate dramatically and cut into your profit margins. Your distribution software should offer you the ability to build routine maintenance tasks into your budget. This proactive approach helps you forecast your budgets accurately so you're not left with unexpected out-of-pocket expenses when the time comes for repair or replacement.

  3. Lean Operations
    When you're running a business, you try to eliminate waste wherever possible. If you were to perform an impromptu audit of your operations, you should expect to find waste. It exists in many forms, including unused office and warehouse space, obsolete tools, unclaimed products and idle time. All this unwanted excess cuts into your profitability because you're paying for it to sit around, not contributing to your business in any meaningful way.

    Distribution software helps you manage workflow to prevent idle time. It provides inventory management to prevent buildup of unwanted products. Business intelligence gives you the chance to proactively spot waste without letting it severely impact your bottom line.
Overhead costs make up a major portion of your total expenditure as a business. Cutting your overhead is a smart way to improve your profit margins and boost your operational efficiency. Distribution software is a great tool for helping you achieve these goals.

Learn more about distribution software and all the tools in SMB Suite's comprehensive ERP software package. Your business's improved success, efficiency and profitability await you.

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