Blog 6

Food distributors are an essential component of the supply chain. Whether they provide goods to restaurants for preparation or to stores for resale, food distributors make it possible for small farms and businesses to thrive without being crushed by shipping. Their margins are small but they make up for it in quantity. Small accounting mistakes can mean big losses. Here are some accounting mistakes to avoid.


Using paper for orders:
It’s amazing that in the digital age so many food distributors are still using carbon paper forms. In the days before tablets they were a huge advantage so both parties could have a copy of the same document. But relying on paper forms leaves too much margin for error. Papers can be lost or misfiled. Ink can fade or not transfer to all sheets and become hard to read. Papers are tied to a location so if you have multiple warehouses you will be tearing your hair out looking for documents. If you are transferring your orders to computer, you are creating an extra step and losing valuable employee time. Use digital order forms, e-signatures, QR or barcode scanning and have copies automatically emailed to all parties and your operation will run smoothly.

Ignoring business to business ecommerce sales: If you’re taking orders with traditional methods (i.e. phone, emails, fax), you are missing a huge portion of your market. B2B ecommerce is growing exponentially and your customers will increasingly expect the ability to place orders online. One advantage is that orders can be placed at any hour so if overnight stock managers place an order at 3 A.M. you will have the order in your system immediately. Another huge advantage is automation. Rather than having someone input the orders manually, the order already gets processed and inventory can be automatically adjusted.

Allowing generous payment plans: It’s tempting to agree to whatever the customer wants in exchange for moving inventory. But keeping the customer happy isn’t always good for your bottom line. If a customer wants to pay for an order with a payment plan, don’t let them dictate the terms. Once your inventory is out the door, there’s not much you can do to get it back. Have a plan in place in case a customer misses a payment and make sure the terms are in writing. If you do business on a handshake you are only putting your company at risk.


Failing to update inventory in real time: The day-to-day operations of a food distribution center can be hectic. Inventory comes in and out at a frantic pace. If you have multiple locations, you may be transferring stock from one warehouse to another to fulfill orders. Knowing what you have on hand is crucial for keeping your shelves stocked and your customers happy. If you get a large order and can’t fulfill it right away, your customer will have to wait for shipping and that means your customer may go elsewhere. Updating your inventory as it moves will save you the headache of having shipping delays and save you money in expediting.

Avoiding these accounting missteps can be the difference between the success or failure of your business. With the right accounting professionals, you can save yourself the headache of audits and inventory errors. JADDE Financial Solutions will help organize your data with accounting software to simplify your process.