Managing Offshore Business Deals Within Sage Accpac ERP

Businesses located in port cities often deal with “offshore”
suppliers who can usually provide a cost advantage for goods over local
competitors. As this became more evident in the 1970’s and 1980’s,
many companies created business models where they not only benefited from
low cost “offshore” suppliers but took the model one step
further by not taking delivery of any inventory. Instead, they had goods
sent directly to their customers from the supplier.

This “middleman” or “jobber” model is popular
with businesses that supply specialty merchandise with company logos such
as pens, paper, shirts or other promotional items. It is also popular
with companies who supply specialized materials and equipment to hotels,
hospitals, universities or the military.

The nature of these deals is that you can have several purchases from
multiple suppliers and several sales to multiple customers all related
to the same Job. In Accpac, it is not possible to track multiple purchases
and sales orders under one job at the transaction level. Until now.

Trade Job Costing is a new solution for Accpac that captures information
about a wholesale trade deal and updates related operational transactions
(sales orders and purchase orders) in Accpac. Deals are commercial projects
or jobs, which are potential orders that may or may not be confirmed and
which consist of numerous business transactions conducted by an intermediary
or “jobber” between a number of vendors and customers. In
addition to tracking historical and analytical data on deals, Trade Job
Costing is useful for tracking order fulfillment, purchase commitments
and margin analysis on jobs.

There are several business benefits gained by implementing the Trade
Job Costing solution. Businesses can:

  1. manage trade jobs within Sage Accpac ERP;
  2. sell products before they are purchased;
  3. track actual sales and purchases to calculate margins;
  4. attach electronic documents to trade jobs;
  5. add customized notes to trade jobs;
  6. generate status reports at any time during the life cycle of a job.

In addition to the Trade Job Costing module, there is also a new Trade
Finance solution that allows businesses who purchase from “offshore”
suppliers to manage all aspects of purchasing goods with Letters of Credit
inside Sage Accpac ERP.

You can amend a Letter of Credit as many times as necessary and keep
a full history of the Letter of Credit from the day of opening to the
day of closing. Open Letters of Credit can also be adjusted, reversed,
canceled or closed at any time. The system will track not only approved
Letters of Credit but also those rejected and waiting approval.

Integration to Accpac is very tight since Trade Finance is written with
Accpac’s software development kit. As a result, Bank charges are
posted to Accpac’s Bank Services module and Vendor Payments are
processed through Accounts Payable as normal.

Trade Finance can capture various shipment details such as Port of Shipment,
Port of Destination and Carrier. You can also define whether partial shipments
are allowed or not. Transhipments, where goods have been reshipped from
one port to another, can also be tracked.

There are several business benefits gained by implementing the Trade
Finance solution. Businesses can:

  1. monitor exposure to currency risk and total charges by Letter of
    Credit;
  2. monitor exposure by bank to assess cash flow needs;
  3. monitor exposure by vendor to assess commitments;
  4. keep track of all shipment and payment schedules;
  5. keep track of all insurance and inspection details;
  6. create a list of documents required to complete Letters of Credit;
  7. link various Accpac documents (such as invoices) to the Letter of
    Credit;
  8. monitor margins withheld, credit lines and any collateral pledged
    against Letters of Credit;
  9. attach electronic documents to Letters of Credit.

If your company trades with “offshore” suppliers and/or Letters
of Credit you should consider the benefits of these solutions to your
business.

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This entry was posted in July 2006, Newsletter and tagged , , , , , . Bookmark the permalink.

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