Order to Cash
Multi Home Projects
(Will discuss Single Home Projects Later)
One Main Project
For Example:
Hickorywood Farms Subdivision 10 House Fences
Sales Orders
Converted from Sales Quotes on the Opportunity
One Parent Sales Order
6 Fence Posts = $0
2X2 Wood - 6 Foot = $0
2X4 - 4 Foot = $0
Total = $0
Children Sales Orders- One for Each Residence
One Line includes parts and labor
Residence 1 Example:
Item: Home Fence = 4,500.00
Install 2 Posts
Install 40ft of fence
Includes Labor
Residence 2 Example:
Item: Home Fence = 2,500.00
Install 1 Post
Install 10ft of fence
Includes Labor
Do you want multiple sales orders per phase?
Phase 1 - Parent Sales Order
Posts
Labor
Install Posts
When a project is sold, they post job openings
Use 3rd Party Service Crew
They use 5 different vendors for services
Pre agreed upon labor price
Send PO to 3rd Party (See https://mdnusa.atlassian.net/wiki/spaces/FenceGate/pages/edit-v2/3139076100#Order-Fulfillment )
Phase 2 - Parent Sales Order
It is possible they need to update the quote order at this time.
Sometimes they will change the quote
Sometimes they won’t
Extra Parts or Supplies
Labor for the remaining work
3rd Party
Sales Invoices
Payment Terms Options
Need be able to create prepayment invoices without shipping.
Prepayment/1st deposit = 50% of the quote.
After 50 days it becomes non refundable
There are other payment terms
Parent Sales Invoice
$0
Children Sales Invoice
50% Prepayment for each Residence
Order Fulfillment
Phase 1 Parent Sales Order
1st Warehouse Shipment
Includes Posts
Line Item for Labor = Special Order
Will need to setup Purchase Prices
Purchase Order #1
Phase 2 Parent Sales Order
2nd Warehouse Shipment
Includes Other Parts & Supplies
Line Item for Labor = Special Order
Purchase Order #2
Forecasting & Supply/Demand Planning
2 Month Lead time from vendors
Want to only carry 2 months of inventory
Would like to be able to identify categories based on turn around time
Would be nice to forecast what work orders are needed for the smaller pieces of wood.
Would like to set up safety stock levels
General
Evaluate each year what is needed
Bulk Purchases at the end of the year
Only one Vendor per Item
They don’t have multiple vendors they would order the same item from.
They receive a big savings for purchasing in bulk
150K - 200K a year
But the downside to this is 28-40% of their cash is tied up in inventory
They currently carry about 6 months of inventory - they’d like to reduce to 2 months.
Only purchase from US and Canada
Very rarely overseas
200 SKUs that they don’t keep in stock
Purchase as special orders as needed.
Blanket Purchase Order
Create based on what they think they need for that year.
Qty | On Purchase Order (Create these POs as needed) | Remaining |
|---|---|---|
500k | 200K | 300K |
“Child” Purchase Orders when Items are Shipped from Vendor
2 Month Lead Time
Linked to Blanket Purchase Order
Need to make a payment before it’s received.
90% of total
Process
Shipment 1 of x
Item(s) in transit
Pre Payment Invoice for this shipment
Receive
Confirm Receipt
Manage Short and Overages
Credits or Payments
Shipment 2 of x
Repeat….
Inventory
Warehouses
2 warehouses
Overstock goes to one of these WH
Would like to manage inventory for each WH
One has a yard location
Rack Locations at Warehouse 1
Bulk Storage
Small Bin Locations at Warehouse 2
Phase 1 - Do not track individual bins
This would be too confusing to current emnployees
Work Orders
Long pieces of wood cut down into smaller sections
Tracked in feet
These smaller sections could be byproducts.
Right now they do inventory adjustments to manage this.
Financial Accounting
Multi-currency (USD and CAD)
Reports/KPIs
Used to calculate the difference between Sub Contractors and Hourly Crew
Sub Contractor Cost
Project
3rd Party Crew
Contractor Rate
Commissions for Sales Person
Hourly Crew Cost
Rate
Note: Hourly Crew rate comes from a separate payroll system.
Overhead
Etc