ERP Software: Sales Made Easy

When budgets and staffing are already stretched thin, distributors must create new efficiencies to remain competitive. For help, many use enterprise resource planning (ERP) software to streamline business practices.

"Technology is something you have to wrap your arms around or you're going to fall behind," says Dennis Warren, owner and president of Midland Chemical in Midland, Mich. "If you keep doing things the same old way, you shouldn't expect different results."

Newer versions of ERP are more comprehensive than ever, managing most day-to-day activities of a jan/san distributorship. They also include applications to boost productivity among sales staff and management.

In The Field

ERP software can be installed on a salesperson's laptop or smartphone to provide on-the-go access to a wealth of data. When a sales rep logs into the system, he or she can find complete information about each of his or her accounts. In a matter of seconds, the rep can also check stock, stay abreast of price changes and schedule deliveries.

In the past, distributors printed weekly inventory reports for salespeople, who then frequently called the office for updates during sales calls. Now information is live and accurate and office staff can instantly message the sales force to alert them to changes.

"All of their questions are answered right in front of them," Warren says. "It's a huge time saver."

The software can further simplify the sales process by making reps more proactive. An ERP program can anticipate any customer's needs based on order history and automatically prompt a salesperson to ask about reorders.

"You're not guessing," Warren says. "It really helps the salesperson because he's not left floating out there wondering when the next order might come in for those products."

ERP software is designed to take the guesswork out of the entire sales process, including account management. Most programs have a module dedicated to sales leads.

Using this system, salespeople can capture complete contact information for potential and current accounts as well as track and monitor their communication with these customers. The software prompts reps to record in an activity log the details and deadlines of any quote or conversation. The logs can be used to create a daily to-do list that also includes any company-related tasks, such as staff meetings.

"They work off that list all day to help with time management," says Shawn Sizonen, sales manager at Professional Supply in Sheboygan, Wis. "It tells them exactly who they need to contact, at what time, and what they need to follow up about."

An automated process with real-time information also helps salespeople with setting and tracking goals. At any given time, reps can see how their actual sales measure up to monthly goals. They can also evaluate how any individual account is performing compared to previous months or years.

"The information is very powerful and it's easy to understand," says Thomas Field, president of Tomar Industries Inc., in Freehold, N.J.

In The Office

ERP software is also a boon to sales management. Many of the same features that help sales reps can help their bosses, as well. For example, the ability to predict reorders can help managers with inventory planning.

"A sales manager or owner can see what is in the pipeline to anticipate how much new business a customer may bring in the coming months," Field says.

Likewise, just as reps can track their goals, so can managers, who can use the information to conduct timely and accurate performance reviews. Not only can a manager evaluate a rep's current sales numbers, he can also compare them against previous months and against other employees' records.

Up-to-date reporting also allows management to keep tabs on buying patterns and address problems early. A customer who suddenly stops buying a product, for example, may be unhappy with its performance. Using software to identify that trend quickly allows the manager to step in and solve the problem.

Managers can also easily take note of customers that are not receiving enough attention or those who have dramatically changed their buying patterns. If a quick review of the reps' notes do not explain the situations, further discussion may be necessary.

"The sales department has no more excuses for not knowing [what] is going on with a customer," Field says. "All the information is right there. There shouldn't be any surprises."

Automated order-review systems also allow managers to quickly analyze margins on every sale. For example, if someone buys a case of toilet tissue at a 40 percent margin and a case of towels at a 13 percent margin, the system will flag the irregularity. Management can then determine whether the price needs to be raised or if the anomaly is due to a promotion or other acceptable reason.

"If our price goes up, the customer is quoted prices at a higher rate automatically," Warren says.

What many managers like most about ERP software, however, is its ability to manage sales commissions. The programs typically include a matrix for calculating earnings based on each distributor's specific parameters.

"Commissions are a very sensitive topic because you are dealing with people's livelihoods," Field says. "A sales department needs to know their commissions are accurate, so it helps to have a reliable system like this."

Using the software, a manager can see how much commission any salesperson is earning at any given moment and compare that performance over time.

"It's made commissions a breeze," says Warren, who switched to his new software in August 2008. "What would take hours to hand calculate now takes five minutes."

The automatic calculations also allow managers to get creative with commissions. The company can offer a percentage incentive on a particular product line with just the click of a button. In the past, these types of promos were an accounting nightmare for managers.

Similarly, the software eliminates the headache of handling discounts, late payments and charge backs. If a salesperson discounts anything, the system automatically adjusts the commission and alerts management to the change. If a customer is late with a payment, the software can even be programmed to reduce the amount of commission the salesperson receives.

"Every week in their sales stubs, the salespeople get a list of who is about to go into a reduced-commission situation," Warren says. "It's made collections of our receivables much faster because the salespeople now have a way to see it's going to happen before it does. They have a vested interest."

Implementing and upgrading software is a significant investment, but the hefty price tag can be easily offset with improved sales figures. Technology can help streamline the sales process and allow reps to tackle more functions on-the-go, allowing them to spend more time in the field making the sale and less time filing paperwork and managing their notes back in the office.

Becky Mollenkamp is a freelance writer based in Des Moines, Iowa. She is a frequent contributor to Sanitary Maintenance.