DEAR Inventory Setup Guidelines
So you’re looking to use DEAR Inventory in your business?
Good decision. Now comes the critical part; Implementation!
As a leading DEAR Inventory partner, and having completed setups for a huge number of different wholesale industries, we’re very proud to present our guide to setting up DEAR Inventory for minimum friction and maximum impact on your business.
One of the most important things to think about prior to any software migration or implementation is to scope the requirements.
Questions
As part of this article, I tried to think about the questions you should ask yourself as a business that wants to start using DEAR Inventory as an inventory management system. The more I think about this, the more difficult it is to know without asking questions in more detail, and knowing more about your individual business, but here are some starters.
How many different products do you sell?
How many different variants vs finished goods?
Are there manufacturing steps involved in order to obtain finished goods?
What costing methods do you use for inventory (FIFO, batch tracking, FEFO)?
Do you use serial numbers or batch tracking for identification purposes?
Do you charge for shipping or freight?
Do you deal with multiple currencies ($USD, $GBP, $AUD)?
How many customers do you have?
How many sales orders/invoices do you produce per month?
How many POs do you produce per month?
How many suppliers do you run POs for?
What is the monthly turnover?
How many staff do you have in the office?
How many staff do you have in the field?
What accounting program are you using now?
These questions above will give you an idea of the magnitude of tasks in moving your company onto DEAR Inventory, however, taking one thing at a time we can break the information down. The next thing to think about is the workflows and methods that you currently have in place, as well as where your data and information is held.
Workflows
If you have workflow diagrams within your business then this is a brilliant time to dust them off and make sure they are up to scratch. If you don’t have them, I can’t recommend doing them now high enough. There are sites such as Lucidchart where you can design these up for a very low fee (even free if they are small enough). Do consider however that you may have to change processes as part of this merger, as information will be handled in different (and often better) ways. Just because you’ve done something a certain way in an old system for 15 years, it doesn’t mean it’s the only, or best, way to do it going forward.
Current Data
Next, where is your data and information at the moment! This is sometimes the toughest question to answer because all too often it’s “in our director’s head” and there are no policies and procedures around what happens in the day-to-day running of the agency. That said, most people have some kind of master system for each area of information, even if it’s Microsoft Outlook for contacts, your accounting program for items and suppliers, or something else along similar lines.
The most common thing we see at Waypoint is companies using Excel for inventory. Although this has its pitfalls, it’s still better than pen and paper – so any system can be good to take information from.
Next Steps…
So now you should have a map of the current processes within your business, an idea of where the information is going to come from, as well as a scope of how you want your new DEAR Inventory system to handle your data in the future. This is everything you need to get a good implementation up and running, and now it’s on to the fun stuff – Setup and Admin! Following on from this we will look at going live, testing and reporting.
Setup
In our previous section we looked at the scope required and areas to think about before setting up DEAR Inventory, and now we will move onto the setup. We will attempt to cover off the main areas of setup which MUST be looked at prior to putting anything live through DEAR Inventory, and talk about some of the effects that these have.
Admin Setup
All of the setup discussed in this area is available from the Admin tab in DEAR Inventory (right-hand side of the top toolbar). We recommend you review the areas below prior to using the system as they can have a profound effect on workflows and how you handle information.
Users – make sure to invite everybody who needs access within your company. This is done by going to Users & Permissions > Invite New User, and then filling in the information. Name, Email Address and other personal information is all fairly obvious, but pay close attention to the security settings at the bottom of the page (visible once a user is selected) as you can set EXACTLY what each user has access to. For example, an accounts person may need to invoice and compile Purchase Orders but doesn’t require access to stock adjustments. Also, ensure there is one Master User that is assigned to the account that has the ability to change other user permissions when needed.
General Settings – review each and every option here and use this time as a good opportunity to set some ‘business rules’ for how you are going to work going forward. If you don’t currently have a standard answer for some of the items in the Preferences section, PLEASE think about them. From Organisational setup to Sales Order information, filling in the settings comprehensively will enable a relatively smooth process from purchasing supplies to stock adjustment. Depending on the configuration, these settings can determine the degree of automation an organisation will have in the ‘order to pay’ process.
Reference Books – there are some useful fields in this section for customising email defaults, email addresses to use for customers and also branding for your system. The main section located here is the financial information that is used for linking your chart of accounts, payment terms, account mapping and taxation rules. Another valuable field is location and bins which enables you to create separate multiple locations for products. Although not essential to customise before using DEAR Inventory until going live, it’s a good one to check through.
Products
The tracking of raw materials to finished goods, whilst attributing costs to assembling and distributing can be complex depending on the nature of the business. There are areas located in DEAR Inventory that may need closer scrutiny to ensure all bases are covered.
Bill of Materials – each of the BOM will have a unique identifier just the same as all the products, so the cost of production is traceable. From wastage to write-offs, and assembly to disassembly, each step can be customised to the degree of automation. When turning on such settings, the quantities, pricing tiers and components of stock have a huge influence.
Multiple Currencies – this function allows the trading currency to be valued in near-live exchange rates. As there may be some delays with payment date or between shipment and arrival of goods, there can be some discrepancies in anticipated dollar value. A good point to keep in mind.
Drop-Shipping – using this option allows to you buy and sell items that you never actually stock as a form of inventory. Automatically sending the PO to the supplier, this feature allows you to link the order from the customer to the supplier.
Xero
As a general rule for the Xero connection you will want to do the following (in DEAR Inventory itself):
Be aware that when testing you should always use an independent DEAR file, and an independent Xero file. If you connect DEAR to Xero, and plan to use them after testing, any changes to the chart of accounts will cause chaos going forwards. If you would like us to set up a trial of both systems and connect them (free of charge) – please contact us.
Connect DEAR Inventory to Xero (Integration > Xero)
Import your contacts (there is a button in the top left for this). In this sync, there is an option to treat all Xero contacts as customers in DEAR.
Disconnect Xero
This way you can get all your clients into DEAR Inventory to start testing, but without anything that you do having an impact on Xero. Given that Xero contains the one source of truth for your financial accounting, the last thing you want is someone in your business testing things in DEAR Inventory and pushing false invoices or other information into Xero.
Once you are ready to run live, you will need to come back to this page and re-connect Xero, and then run through the fields to set it up. I won’t touch specifically on the options here for Chart of Accounts and similar as these are best set up with the advice of your accountant or bookkeeper.
Next Steps…
This should give you plenty of ideas on the setup of your DEAR Inventory system to match your business processes, the next stage will be to run through some sample jobs and test everything for yourselves, as we will cover in the next article.
Testing and Go Live
Ok, moving on from the last two weeks of implementation advice (scope, and setup), we now need to test the system. This is a great time to get out the workflow diagrams which we talked about in the scope section, as these will be particularly useful to help you run information through the system.
Furthermore, I would suggest that you disconnect Xero at this point if you are already using it for your accounts live within your business, as the last thing that you want to do is put false information into your accounting package. An alternative if you still want to test the Xero link is to connect DEAR inventory to the ‘Demo Company’ within Xero. You will have to contact DEAR support to enable this process.
My ‘general’ advice for people in terms of testing, is to use current real company data, but try and pick a selection of products that are usually bought and sold through inventory. Although it can seem easier to use just one department, or just one project manager, this can sometimes fail to properly test the system as they only operate in one format.
Instead, we recommend using a variety of products, preferably from the last few months within your company, so that you can run them through DEAR Inventory and ensure that everything fits your workflows. This is also a great opportunity to make sure that the stock amounts look accurate, your pricing is set correctly, and the margins make sense. There is no such thing as a stupid question at this point, so make sure that plenty of key people within your business are either involved, or at least have the opportunity to look over the data.
Once this is done you will ideally want to remove this information from the system prior to running live, so that your reports and figures aren’t negatively affected by wrong data. In most cases you are able to deprecate a product in DEAR Inventory, even if it has been previously bought or sold.
The other areas to test if dealing with auto assembly will be the finished goods function. This will only really apply to organisations that deal with manufacturing or using existing products to make a new final product. Try and set up assemblies that have a range of different Bill of Materials in order to understand the workflow associated with DEAR and how this may influence stock levels/ distribution. When coupled with reporting in DEAR Inventory this can be a powerful tool in gauging ordering/stock allocation cycles enabling a more efficient storage system, whilst also keeping an eye on wastage.
For specialty products or ones that require tax, individual tax codes can be set up under Users & Permissions > taxation rules. For instance this is useful for the viticultural industries that work with compounding taxes such as GST and possibly with WET. Cost reporting can be done at this stage to capture the impact of such expenses on profit margins. Spotting this at the testing stage is much easier to resolve that months down the line when everything has also flowed into Xero and has been reconciled. As the medical profession states “prevention is always better than a cure”.
Keep entering product information, following orders from acquiring supplies to shipping in order for the users and staff to get a handle of the new system and make sure it is working as expected. As mentioned above, at this point if you have questions on anything, shout out to DEAR Inventory Support or engage a DEAR Inventory certified partner to work with you. It’s important to get everything locked away prior to using the system live.
From here, our next (and final) section will look at reviewing system setup, and improvements you can make after going live.
Review and Reporting
Ok, following on from our last two sections (which covered Setup and then Testing), we now need to look at what’s in DEAR Inventory, and what to review in order to improve this.
At this point, you have hopefully been putting live information into the system including such things as purchase orders, products, bill of materials (if any), sales orders/ invoices and adjusting stock as required. This will give you a healthy body of information to report on and use within your business to improve efficiency.
There are a couple of areas where you can modify the system to fit your internal workflows, and I highly recommend you look at these as soon as possible after you implement and go live.
Product Categories and Templates
Firstly, DEAR Inventory has an option for setting Product categories and Branding. Both these areas can be assigned against products, enabling the grouping of products into different areas. This segregation of products for the standard buy/ sell inventory is needed when a variety of products may attribute to different departmental areas or cost centres.
For example, you are looking at product availability for a customer in the system, you have 1000’s of products listed, however, you only want to see how many Accessories are listed. By default, there is no tab separating one product from the rest, only the SKU code. Custom Categories and Brand are both searchable items that allow you to drill down and identify groups of products more easily. Located under Settings > Reference books, then click Categories and you will be able to customise products in order for easier identification, but more comprehensive reporting.
Product families are useful for grouping products together for bulk purchases for customers to save time in selecting individual products on recurring orders.
Your second main area of review and improvement to look at in DEAR Inventor is Custom Templates, which are primarily used to edit and customise forms within the system such as invoices and purchase orders. Other items that can be customised such as Picking/ Packing slips can be customised so that only specific information and detail can be displayed on both. There are a huge amount of ways in which you can customise your invoices and purchase orders, however, you will need a good knowledge of Microsoft Word and an understanding of mail merge tags to use these. There is a huge amount more information on this here: http://support.dearsystems.com/support/solutions/articles/11000071930-manage-document-and-email-templates
If you are at all unsure, either get a professional to assist you, or at least set a new dummy template up and work with that, I’ve seen far too many customers play about with their default invoice template and then not be able to send invoices until they get it corrected up.
Reporting and Review
Finally, I recommend that all DEAR Inventory clients spend a full half-day (at least) performing a system review and reporting after about a month of use. One month is ideal because you’ve had enough time to get good information into the system and perform most tasks, but it’s early enough to make any adjustments or corrections that you need to.
The first set of reports that you want to review is available from Reports > Financial Reports. For a first run, our suggestion would be that you run one copy of every single report and familiarise yourself with the information, and what this report refers to, as well as decide whether it’s useful for your business to review each month going forward.
In addition to this, you can also create your own reports from Reports > (Chose any report you want to customise). Here you can move columns around, add and remove segments of the report information you need or don’t need. Once you are complete, the report can be saved under layout for future reference. This customisable reporting is valuable when breaking down components of inventory into categories or products to gain greater insight into movements of stock. Reports can be exported into Microsoft Excel if you desire to filter any other aspects of the data or to represent it graphically. Again, as with templates if you are at all unsure please create dummy reports first or engage a professional to help.
I hope that this has been a useful guide to DEAR Inventory and implementation.
Implementing a brand new software (and especially one as detailed as DEAR Inventory) is never easy but we are recognised by Xero and others as specialists in this field and happy to help with any queries or manage the entire change for you including training, setup, implementation, support, and more.
As always, if you need any specific advice or hands-on support you can contact us below.
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