Barcodes were first widely used by the grocery industry as a means to reduce expenses related to tracking inventory and to automate the checkout line. Other retail businesses rapidly followed this lead. Because of their versatility, barcodes are now widely used to speed up data processing and reduce data errors created by manual entries.

Expense Reduction

Barcode Software has no physical inventory because we need to always ship the latest version, batch and build of programs, all of which are constantly being updated. During the yearlong process of developing our BMS Suite for barcode enabled inventory management we realized that barcodes are useful not only for automating data flow from the warehouse to the accounting program but for all kinds of data processing.

Before BMS Suite, when we were creating a quotation, sales order, purchase order or invoice we manually entered the item id number, which, of course, involved looking it up to begin with. Now we have bar-coded all inventory items and printed them on what have come to be know as “cheat sheets”, which are nothing but pieces of paper with a bunch of barcode data printed on them in a form that the individual items can be read by a scanner. The “cheat sheets” show the barcode, the inventory item id number, the inventory item name and the current price. These are grouped by products or services and can be quickly found and scanned. The scan fills in the appropriate line items of the form being created. To further save time we also have bar-coded all customers and vendors.

Generally, the most efficient and cost effective way to manage purchasing, sales and physical inventory is for the respective departments responsible for each of those areas to assume responsibility for the creation of data relevant to their own departments. The purchasing department should create purchase orders; the sales department should create quotations, sales orders and invoices; the warehouse should track what has come in and gone out the door and, therefore, what is currently in inventory. Ignoring the responsibilities related to accounts receivable, accounts payable and payroll, the accounting department should be a repository of current information. Anyone needing current inventory information need only refer to the accounting program.

Using barcodes as barcode software does, the paperwork side of purchasing and sales is fast and data errors are virtually eliminated. With BMS Suite for automating inventory management, scanning barcodes on all items received or shipped permits such data to be easily uploaded and accounting to accurately reflect only actual outstanding purchase and sales orders. At the same time BMS Suite causes fulfilled purchase orders to “go away” and fulfilled sales orders to be converted to invoices. Having informed Peachtree of all additions to and reductions from current inventory, it is automatically updated and therefore reliable.

Working Capital Needs Reduction

To insure that neither too much nor too little inventory is in the warehouse at any given time, sales must (1) know at all times what is actually in inventory and (2) predict as accurately as possible how many of each item needs to be in inventory at any given time. The first is easy; the combination of BMS Suite functionality and Peachtree functionality insures that current inventory data, as shown in Peachtree, is accurate. The second requires the study of historical sales data as shown in Peachtree, the analysis of current sales trends and, based on those, the prediction of short-term sales probability.

It is relatively easy to see that sales of Widget A have historically been about “X” in January and “Y” in July. If “X” = 100 and “Y” = 50, there is no reason to have 100 of Widget As on hand in July. However, if sales of Widget A appears to be gradually increasing overall then it might be wise to have, say, 60 on hand in July. The working capital required to have sufficient Widget As on hand in July is thus reduced by the cost of 40 Widget As.

Summary

Every business tries to minimize working capital requirements and maximize profit. Having neither too much nor too little inventory on hand reduces the working capital required for inventory. The use of barcodes to increase the speed and accuracy of purchase orders, quotations, sales orders and invoices causes a corresponding reduction in expenses. Using a barcode enabled inventory management system also permits a reduction in expenses by automating data flow and eliminating the necessity of duplicate activities to achieve the availability of accurate current information, together with virtually no data entry error.

Most businesses have to deal with inventory. It has to be purchased; it has to be stored for some period of time someplace; it has to be resold - hopefully for a profit. Most accounting software lets us easily create purchase orders and sales orders. Generally it is possible to convert a sales order to an invoice once the items on the sales order have, in fact, been shipped. What is not so easy is keeping the accounting program up to date as to what items that `have been ordered have actually arrived and what items that have been sold have actually been shipped. Therefore, the accounting program may not be a reliable source as to the actual status of what is and what is not in inventory.

We have been supporting Peachtree for 20 years and have been creating software that makes Peachtree do things it doesn't do for 11 Years. For a long time we marketed a product named Barcode Wizard. About a year ago we decided to completely rewrite that program and create a versatile complete inventory management program. BMS Suite was the result.

THE BASICS

Getting Peachtree and bar codes acquainted.

BMS assumes that all items in your inventory are currently entered in Peachtree with ID numbers. If you look at the Maintain Inventory Items screen you will notice that just below the line in the middle is a box with the name UPC/SKU. That is the number that appears on a bar code just below the vertical lines. If you put your cursor in the UPC/SKU box and scan the bar code you want to use with that inventory item, it will fill in that box. Or you can type it in. That number forever ties that inventory item to that bar code. Later when you scan that bar code Peachtree knows what inventory item was scanned. BMS tells Peachtree why it was scanned and what has happened to outstanding purchase or sales orders and whether to add to or subtract from inventory.

If you use a “pocket pc” scanner it rests in its cradle when not in use. These scanners are actually specialized commercial grade computers with their own hard drives and with substantial memory, but small enough to easily carry around. The cradle is attached to a workstation upon which you have installed BMS; it also is a charger for the pocket pc batteries. Before you remove the scanner from its cradle for use, Peachtree must download current inventory data to BMS and downloads that data to the pocket pc via its cradle. When the download is complete, there will have been downloaded from Peachtree the names of all vendors and customers, Ship To information, your inventory item list, your complete physical inventory, and all outstanding purchase orders and sales orders. The pocket pc then has all of the information from Peachtree that is relevant to inventory management. If, instead, you use a desktop scanner it is attached to the workstation that has BMS on it and can view on the monitor everything downloaded from Peachtree. Of course, that means you have to bring the items to scan to the scanner rather than taking the scanner to the items.

Receiving and Shipping

When a shipment arrives from a vendor, you choose the corresponding outstanding purchase order from the list on the pocket pc or computer screen and scan the incoming items. The pocket pc will make a note as to what you have received. The desktop scanner will update BMS as you scan.

Similarly, when you ship, you choose the corresponding outstanding sales order from the list on the screen and scan the outgoing items. Later, when you replace the scanner in the cradle you have BMS upload all of the new information from the scanner.

Updating Peachtree

Built into the Peachtree program is a requirement that to update Peachtree from a source other than a mouse or keyboard operated by someone with appropriate rights while Peachtree is running, only an individual with “Administrator” rights can authorize it.

An administrator at a workstation with both Peachtree and BMS installed will instruct BMS to upload data to Peachtree. Uploaded will be everything that was scanned into BMS, either directly from the desktop or from the pocket PC via its cradle, since Peachtree last updated BMS. As to purchase orders, it will tell Peachtree those items received and to add them to inventory. If the purchase order has been fulfilled the purchase order will be marked as fulfilled. As to sales orders, it will tell Peachtree that the sales order has been fulfilled, remove those items from inventory and convert the sales order to an invoice.

Peachtree can thus be updated as often as necessary and can accurately reflect changes to and the current status of inventory.