Tag Archives: Value

Inventory value in foreign prepayment scenarios

I have this client who operates in very specific conditions: majority of their vendors are foreign companies which invoice them in a foreign currency (USD) and almost invariably ask for at least 50% prepayment.

NAV can handle prepayments and foreign currencies like a charm—the issue lies elsewhere: the fluctuations of currency exchange rate can easily cause real and tangible losses.

Even though prepayment invoice is fully closed by a prepayment applied against it, the actual costs of goods is not calculated from prepayment invoice, but from the actual invoice. And if there was difference between currency exchange rate at prepayment and invoicing dates, the inventory value reflects the actual invoiced value (instead of the prepaid value), there is currency exchange gain/loss which is fictitious, but taxable.

Thankfully, there are ways to avoid this.

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My new career path – independent consultant

It’s official now, and it’s time I announce it here: after two years at Microsoft I’ve decided to take the helm of my career and venture into the realm of independent consulting. Two days into it, and all I can say about it is: what have I been waiting for this long?

While at Microsoft, I had a chance to work on some very exciting projects, I was sitting at the source of information, and the thrill of being able to know about all the news and developments before anyone else is priceless.

But the thrill of being able to work on my own, to pick my own projects, to take on completely new challenges, was even more priceless.

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5th rule of agile ERP: interface where possible

imageOne of the biggest absurdities about ERP systems springs from the very word we use so often when describing ERP: integrated.

ERP is an integrated system: it integrates all data and processes into a single application. Different modules look over different aspects of data and processes, but a change in one module automatically reflects in all others.

A fantastic concept. When it was invented, it streamlined processes, boosted productivity and eliminated overhead and error.

So, whenever a new functionality is needed by a company, it should be integrated into the ERP, to benefit from the integrated system. Right?

Wrong.

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4th rule of agile ERP: avoid heavy customizations

You can’t avoid customizations. Vanilla ERP is a great first step, and a valuable tool for establishing common language between the customer and the consultant. But in the long run? Probably not. Pristine uncustomized ERP won’t be sufficient, because of the gaps between your way and ERP’s way. Sooner or later, gaps will have to go.

Two most common ways of closing functionality gaps are customizing the software, and changing the processes. You can almost always touch general processes, optimize them, twist them, bend them, make them more efficient or even eliminate them. But when it is about industry specifics that add true value or contribute to company’s competitive edge, customization is the answer.

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3rd rule of agile ERP: focus on value

image – “We need a report which groups our sales by product components.”

– “And we need it broken down by cost centers.”

– “And it must show comparison with last month, quarter and year, and with budget and forecast, with indexes and trends. In linear regression.”

– “And it must let you choose if it is by posting date or by document date. Or by shipment date. Maybe some other date as well.”

– “And it must exclude returns, and include only those re-shipments that were linked to original returns in the shown period.”

And it must be a disaster if you agree to half of these.

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