Financial Systems Case Study: The Tile House
John Almon established The Tile House in 1988 – a hands-on family run business that sources and supplies high-quality tile products to the South African market.
In 2018 they decided to break away from a larger retail group and needed to become fully independent. This was their opportunity to move away from a centralised and bureaucratic laden Enterprise Resource Planning (ERP) and migrate on to two comprehensive, understandable and affordable cloud-based systems, where real-time information is available, instantly. The Tile House, subsequently approached Creative CFO’s systems experts to assist them with the implementation.
The Challenge
- The Tile House was breaking away from their previous group owners financial systems, so a change in ownership required a
change in systems - The business was lacking in operational independence – previously there were high levels of bureaucracy to deal with when
implementing small changes - Inventory valuation amounts sometimes differed from underlying supplier invoices – many older systems still have a GRN
(‘goods received note’) process which is separate from the loading of supplier invoices - Financial reporting was frustrating and not user-friendly – John and his team had a strong desire for reports which were easier
to understand, navigate and customise - Remote system access – information could not be acquired remotely for their old system was unstable and not cloud-based
Our Approach
Customers
Customers were set up in such a way so that the revenue account is allocated based on customer rather than on product. This allows us to easily see the breakdown of cash vs credit sales. Credit limits were also allocated to credit customers. Only the accounts department and management can override credit limits.
Suppliers
Suppliers were brought into the system with special attention given to payment terms, currency and VAT treatment as there are a wide variety of suppliers. Suppliers are also separated into local and foreign using an additional attribute. Only stock controllers and management can add suppliers.
Sales
With a heavy segregation of duties in place for each sale, the sales process is best described using the Dear workflow
Quote, Order & Pick
Sales representatives perform a customer quote and/or authorise the customer order. They then pick the particular product for the customer.
This is a very important step in the building supplies trade as certain batches may be of different measurements or colour shades. After picking, the representative prints a picking slip for dispatch.
Pack & Ship
These steps are performed by dispatch. Dispatch selects the stock from the warehouse and packs the stock. If the stock needs to be shipped in multi shipments the sale is converted to an advanced sale and each shipment is packed separately. A delivery note is printed upon shipping. The customer signs the delivery note after receiving the goods and this is uploaded to the Sales Order as an attached Proof of Delivery.
Invoice
For cash customers the invoice is authorised by the cashier who also applies payment. The invoice is then printed and given to the customer.
For credit customers, the invoices are authorised in bulk (post fulfillment) by the accounts department. The credit customer invoices are emailed to customers.
Purchases
The stock controllers handle purchases. After the supplier has delivered the stock, the stock controller loads the supplier invoice and does the stock receipt at the same time.
The Results
With the Creative CFO’s deep technical knowledge and extensive experience in Dear Inventory and Xero Accounting, John and his management team could look forward to a seamless and stress-free systems implementation and roll out.
- A scalable system that can handle the addition of outlets or warehouses, and also a larger product list
- A system with malleable reports that can be used for reporting to Sales Representatives, Stock Controllers, Management and Owners
- A live system which can adequately deal with multiple users at the same time (20 Dear users to start)
- Software that can easily accommodate a complex segregation of duties, utilising different roles and responsibilities for: Sales Representatives, Cashiers, Dispatch, Stock Controllers, Accounts, and Management
- A system that can help management maintain control