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DEAR Inventory Training Implementation – Full Guidelines

Updated: Dec 10, 2021


DEAR Inventory being the leading partner based in Australia, having completed setups for a range of wholesale businesses, we are happy to provide our guide on setting up DEAR Inventory with the least amount of friction and the greatest benefit.


A scope of the requirements is one of the first things you need to consider when moving or implementing software.

Questions

The purpose of this article is to provide you with some questions to ask yourself if you're an organization considering DEAR Inventory as an inventory management system. It's hard to know without knowing more about your business, so here are some starters that you can use to get started...

  • How many different products do you sell?

  • How many different variants vs finished goods?

  • Are there manufacturing steps involved in order to obtain finished goods?

  • What costing methods do you use for inventory (FIFO, batch tracking, FEFO)?

  • Do you use serial numbers or batch tracking for identification purposes?

  • Do you charge for shipping or freight?

  • Do you deal with multiple currencies ($USD, $GBP, $AUD)?

  • How many customers do you have?

  • How many sales orders/invoices do you produce per month?

  • How many PO’s do you produce per month?

  • How many suppliers do you run PO’s for?

  • What is the monthly turnover?

  • How many staff do you have in the office?

  • How many staff do you have in the field?

  • What accounting program are you using now?

Using the questions above we can get a better idea of the reach of the process of moving your company onto DEAR Inventory. As we focus on one thing at a time, we can break things down. Next, think about what workflows and processes you currently use, and where your data and information are stored.

Workflows

Now is a great time to make sure your workflow diagrams are up-to-date and if you have any within your company. If you don't have them, I cannot stress enough how important it is to do so now.

Current Data

Secondly, where are your data and information at present. All too often, this is a question left to the directors' heads, and there are no procedures or policies surrounding what happens in the day to day operations of the agency. That said, most people have some form of master information management system, whether it's Microsoft Outlook for contacts or your accounting program for items and suppliers.

Excel is the most common inventory program we see in businesses. Despite these drawbacks, it's still better than pen and paper - so any system can be helpful for taking information.


Next Steps…

With this information, you now can map out the current processes within your business, know where the data will come from, and envision how your new DEAR Inventory system will handle your data. It is now time to get started with the fun stuff - setting up and administering! We will then move on to going live, testing, and reporting.


Setup

After we discussed the scope for setting up DEAR Inventory in our previous section, we will move on to its configuration. Here we will discuss some of the key setup points that must be addressed before anything can be put live through DEAR Inventory, and discuss the effects of these.


Admin Setup

There are several setup options available in DEAR Inventory's Admin tab (right-hand side). If you wish to use the system effectively, review the following areas as they can profoundly affect workflows and how you handle information.

  • Users - If your company has access requirements, ensure you invite everyone. To do this, go to Users & Permissions > Invite New User, and fill in the necessary information. Personal information like name, email address and other information is clearly visible, but you need to be aware of what is set up in the security settings (visible after selecting the user) so you can control EXACTLY what each user will have access to. Accounts personnel, for example, may need to invoice and compile Purchase Orders, but not to access stock adjustments. Additionally, be sure that a Master User is assigned to the account with the capability of changing the permissions of other users when necessary.

  • General Settings – Take time to review every single option here and consider this opportunity to establish some 'business rules' in order to make future tasks easier. Please consider adding a standard answer to some of the items in the Preferences section if you don't have one currently. By completing the setting comprehensively, everything from ordering supplies to stock adjustment will run relatively smoothly. The configuration of these settings can help determine how much automation an organization uses during the 'order to pay' process.

  • Reference Books – In this section, you can customise default email addresses for customers as well as brand your system. This section contains the financial information used to link charts of accounts, payment terms, account mapping, and taxation rules. A second useful feature is location and bins, which allow you to set up different multiple locations for your products. Before going live, it may not be necessary to customise DEAR Inventory, but it's a good idea to do so.


Products

Managing raw materials to finished goods while distributing and assembling can be very complex depending on the business model. It may be necessary to closely examine some areas of DEAR Inventory to make sure that all bases are covered.

  • Bill of Materials –As each BOM is unique, so are all the products, so that the cost of production can be tracked. Every step can be customized depending on the level of automation, from wastage to write-offs. With such settings, quantities, tiers of pricing, and components of stock have a huge impact.

  • Multiple Currencies – The value of a trading currency can be calculated with close to real-time exchange rates using this function. Depending on when payment is made or when the goods arrive, there may be some discrepancies in the anticipated value. This is an important point to remember.

  • Drop Shipping – You can use this option to buy and sell items that you do not actually have on hand as inventory. A direct link between the order and the supplier is created by automatically sending the PO to the supplier.

Xero

When connecting to Xero, usually the following steps should be taken (in DEAR Inventory itself):

It is always recommended that you use an independent DEAR file, as well as an independent Xero file, when testing. The chart of accounts will be completely disrupted if you connect DEAR to Xero and plan on using them after testing.

  • Connect DEAR Inventory to Xero (Integration > Xero)

  • Import your contacts (there is a button in the top left for this). In this sync there is an option to treat all Xero contacts as customers in DEAR.

  • Disconnect Xero

Thus, all your clients can be added to DEAR Inventory for testing, but nothing will be impacted on Xero. Given that Xero is the one source of truth for your financial accounting, the last thing you need is someone making false invoices or entering false information into Xero while testing things in DEAR Inventory.

Upon running live, you will need to re-connect Xero and then run through the fields to set it up. The options here concerning Chart of Accounts and similar are better left to your accountant or bookkeeper to set up, as these should be done with their guidance.

Next Steps….

The next step is to run sample jobs and test everything for yourself, as we will discuss in the next article. This will give you lots of ideas on how to set up DEAR Inventory to fit your business processes.


Testing and Go Live

As we move on from the last two weeks of implementation advice (scope, and setup), we must now test the system. Here is a great time to pull out your workflow diagrams. We talked about these in the scope section, and they will be especially useful to help you make the information flow through the system.


Additionally, I strongly suggest that you disconnect Xero at this time if you already use it for accounting in your business, since the last thing you want to do is provide false information in your accounting package. Xero’s inventory can be connected to the ‘Demo Company’ within DEAR if you still want to test the Xero link. To enable this process, contact DEAR support.


In terms of testing, my general advice is to use current real company data, but to choose a selection of products that are typically bought and sold with inventory. Having only one department or project manager may seem easier, but when they all operate in one format it is sometimes impossible to properly test the system.


Our recommendation is to use a variety of products, preferably from the last few months within your organization, so that you can run them through DEAR Inventory and ensure that everything fits your workflows. Furthermore, you should consider the stock amounts, your pricing, and the profit margins. At this point, no question is stupid, so ensure your business has plenty of key people who can either contribute to the process or at least look over the data.


Prior to running live, you should remove this information from the system, so that your reports and figures aren't negatively affected by inaccurate information. Even if a product has previously been sold or purchased, you can deprecate it in DEAR Inventory.


In addition to the auto assembly function, the finished goods function should be tested as well. This will only really apply to organisations that deal with manufacturing or using existing products to make a new final product. Try and set up assemblies that have a range of different Bill of Materials in order to understand the workflow associated with DEAR and how this may influence stock levels/ distribution. When coupled with reporting in DEAR Inventory this can be a powerful tool in gauging ordering/stock allocation cycles enabling a more efficient storage system, whilst also keeping an eye on wastage.


You can create individual tax codes under Users & Permissions > taxation rules for products that require tax. As an example, this is helpful in the viticultural industry that deals with compound taxes, such as GST and possibly WET. The costs of such expenses can be reported at this stage to track profit margin effects. In addition, finding this issue during testing is far easier than months down the road when everything has also flowed into Xero and no longer needs to be reconciled. As stated by the medical profession, "prevention is better than cure".


During the initial phases of implementing the new system, keep entering product information and tracking orders from acquiring supplies to shipping so users and staff can figure out how it works. To get assistance at this point, contact DEAR Inventory Support or engage a DEAR Inventory certified partner. Before going live, everything needs to be locked away.


Next (and final) we will address system setup, and how you can improve the process once your site has gone live.


Review and Reporting

As we discussed in our last two sections (Setup and Testing), we now need to examine what is in the DEAR Inventory, and what can be reviewed to improve it.


You have probably already been putting live information into the system, including purchases, products, bill of materials (if any), sales orders/invoices, and stock adjustments as needed. The information you collect will allow you to improve the efficiency of your business and report on it.


After implementing and going live, there are several areas where you can modify the system to meet your internal needs. I highly recommend you revisit these first.


Product Categories and Templates

For starters, DEAR Inventory gives you the option to define categories and branding for your products. It is possible to assign products to both of these categories, allowing products to be grouped into different categories. For the standard buy/sell inventory, products must be separated when they belong to different departmental areas or cost centres.


Suppose you are looking at a customer's product availability in your system. You have 1000s of products listed, but you are only interested in the Accessories. There is no tab separating one product from another, only the SKU code. You can drill down and identify groupings of products more easily with Custom Categories and Brand. Clicking on Settings > Reference books, you can then customize products to allow easier identification but more comprehensive reporting.


Having product families helps customers avoid selecting the same item several times on recurring orders, thus saving them time on bulk purchases.


DEAR Inventor's Custom Templates are the second main area for review and improvement, which primarily are used to edit and customise forms in the system, including invoices and purchase orders. Similarly, other items, such as Picking/Packing slips, can be customized to display only specific information. Using Microsoft Word and mail merge tags will allow you to easily customize your invoices and purchase orders. However, you will need a good understanding of how they work to do so. You can find a lot more information about this here:

http://support.dearsystems.com/support/solutions/articles/11000071930-manage-document-and-email-templates

We have seen far too many customers experiment with their default invoice template and then not be able to send invoices until they correct it. In the event that you are unsure, we recommend either getting a professional to assist you, or setting up a dummy template and working with that.

Reporting and Review

Finally, I recommend that all DEAR Inventory clients spend a full half day (at least) doing a system review and reviewing the report after about a month of use. One month is ideal because you've had time to add good information to the system and to accomplish most tasks, but you've also had time to make any necessary adjustments or corrections.


To review your financial reports, navigate to Reports > Financial Reports from the Reports menu. It is recommended that you first run a copy of each and every report to become familiar with the information and determine how valuable it is for your company to review it every month going forward.


Moreover, you can also create your own reports from Reports > (Choose any report you want to customize). In this area, columns can be moved around and segments of the report can be added or removed as needed. Once you have completed the report, the layout can be saved for future use. Using custom reporting is useful when analyzing components of inventory by categories or products to gain a greater understanding of how inventory moves. If anything else can be filtered in the report or if the data needs to be represented visually, the reports can be exported to Microsoft Excel. If in doubt, as with templates, create dummy reports first or see if a professional can help.


I hope you have found this series helpful in giving you a better understanding of DEAR Inventory and how to implement it.


As always, if you need any assistance or advice, please feel free to contact us below. Even though implementing a brand new software (and especially one as detailed as DEAR Inventory) can be a challenge, we are recognized by Xero as experts in this area and are happy to advise or handle the entire change for you, including training, setup, implementation and support.


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