Machine Capacity

cnc_grinderMachine Capacity is the knowledge required by a manufacturer to gauge how efficient they are in being able to process orders on (most likely) a daily basis. It is NOT a function in a traditional accounting system but a tool used as a byproduct of setting up bills of material in the manufacturing process.
There are three components that go into figuring daily machine capacity:
1. Capacity in hours
2. Standard number of minutes it takes to make one product unit (or SAM)
3. Average Line efficiency

Let’s say you have three machines and you run them 8 hours a day. That gives a maximum of 24 machine hours.

Let’s also say it takes a normal half hour run to make 30 widgets. That averages out to one minute a widget, or 60 in a full hour.

Finally, let’s say your line efficiency is 75%. Your daily capacity, then, is: 60 widgets an hour x 3 machines = 180 widgets max per hour x 8 hours = 1440 x 75% efficiency = 1080 widgets daily capacity.
This means you can take in orders for 1080 widgets that will allow you to turn it over and bill in a day’s time. If you are taking in orders only for 500 widgets a day, then you are running at half capacity.

Average line efficiency is dependent on the number of machine operators, how many hours they work as opposed to maximum hours available to run the machines, how many pieces are produced and the standard number of minutes it takes to make one unit.

You are looking for someone who understands your business and will help you navigate your needs. It’s your money and business on the line. Give us a call at (773)502-5771 to get you on the right track.

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Sales Commission Reporting

Tracking Commissions in an accounting system is not always a simple process. There are several issues related to awarding commissions:

1. Is commission awarded as a flat rate or variable based on product or service sold?
2. Are there line items that do not get awarded a commission?
3. Is freight or footer area miscellaneous charges included?
4. Do some sales rep get different commission rates for the same item sold?

To complicate it further:
Does the rep receive commission on shipped or paid invoices?
It is easier to track based on shipped invoices. You tabulate all the invoices of a selected range of dates. But when it is by paid invoices, the accounting becomes more complicated. What if the customer pays the invoice only partially? If so, you probably want to take the amount received and only apply the commission to it rather than
the full amount.

What about charge-backs when the customer returns merchandise and is given a credit or refund?

When doing commission tracking in an accounting system, expect
that it may not be a simple matter of printing a report. You may decide whether to save the system generated report into a spreadsheet and tweak the numbers accordingly. You may also consider using customized software for a  business that requires less than simple commission processing.

You are looking for someone who understands your business and will help you navigate your needs. It’s your money and business on the line. Give us a call at (773)502-5771 to get you on the right track.

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Annual Inventory Turns

A standard feature on the Inventory Sales Analysis Report is the Annual Turns calculation. It represents how many times an item turns over its stock in a year’s sequence.

The formula usually used is: cost of goods sold divided by  inventory value.  In other words, if you have sold $50000 worth of your entire goods and its average cost value is $25000, then you have turned it over twice. If this represents only the first 4 months of the year, then it is interpolated to mean that for the entire year, it will be three times that or an annual turn of 6.  A company that has a higher annual inventory turnover than a competing company is naturally valued higher.

Some businesses tend to overlook this piece of data and focus more narrowly at the quantity sold year-to-date on an item or product line compared to the previous year. There may also be quarter to quarter comparisons in order to determine which items are fast or slow movers that are not seasonally affected.

Annual turns help a business determine how often they need to make sure the product is purchased or made. It is important that there be someone in your organization that takes the time to examine the analytic reports and use them as a tool to benefit the company.

In any event, make sure your accounting system contains annual turns on the standard sales analysis report.

You are looking for someone who understands your business and will help you navigate your needs. It’s your money and business on the line. Give us a call at (773)502-5771 to get you on the right track.

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Can Accounting Software Be Put on a Cloud and What is a Cloud Anyway?

The ‘cloud’ is the current darling of the high tech world. It is creating jobs for some and taking away for others. Think of the cloud as a rented web server. Instead of maintaining your own equipment, you rent an ip addressable server at a remote location.

Businesses put their computer systems on clouds for two main reasons:

1. Less maintenance cost.
2. Equal access to all.

Less Maintenance Cost

Software applications are installed and run on a computer located in a remote location rather than on your property. No need to own and maintain expensive equipment.

You will need, though, a high speed and large bandwith internet connection to satisfy the reliability of access. No need to hire a staff of expensive hardware support employees for on-site assistance. Hardware and network services are taken care of by the cloud hosting company.

Equal Access to All

Less need to be concerned what type of computer the user has. Everyone uses similar scripts to access the same software.

When the new version of Excel or Word or Access is made available, the remote cloud support personnel install it hassle free.

What are the negatives?

If your internet connection goes down, you cannot access the cloud. If your software is installed on a local computer, then whether the internet is working or not is a moot point.

You need to make sure that your application can be loaded readily onto the cloud. You should never accept a cloud service that tells you that you need to send the installation cd to their location. The cloud service must give you a way to insert the cd in a local workstation and mount it (or connect) to their server.

Do not expect the cloud support staff to have knowledge of your business applications. Their job is to support and maintain the server and network services on which it is hosted.

Accounting Software

Accounting software can be put on the cloud. Don’t expect the cloud support personnel to help you unless they also happen to be authorized support for the accounting system. The advantage of putting your accounting system on the cloud is when you have many users who are at different locations and need a simple way to access it as readily as anyone else.

For more information, call (773) 502-5771 .
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Accessing OSAS Data in Excel

By Larry Teren

1. Go to Microsoft Excel. (The screen shots used here are from Microsoft Excel 2010)

2. Click the DATA tab and the FROM OTHER SOURCES. Slide down to FROM MICROSOFT QUERY and click (See screenshot below). Continue reading “Accessing OSAS Data in Excel”

ODBC Setup in Control Panel for Open Systems Accounting Software (OSAS)

By Larry Teren

1. Click on access to Control Panel link.

On Windows XP, click Administrative Tools Link Continue reading “ODBC Setup in Control Panel for Open Systems Accounting Software (OSAS)”

How to use SQL Query Feature in Enterprise Manager

By Larry Teren
Do the following in order to generate an sql query that you can paste into Microsoft Excel:

Log into Enterprise Manager and establish a properly configured database. Click on the TABLES tab, highlight a table name and double-click on it. In our example below, we have chosen ARCU, the customer master file. Note that it indicates there are 13 rows or customer master records in the table (or file). Continue reading “How to use SQL Query Feature in Enterprise Manager”

Enterprise Manager is versatile OSAS to Microsoft Excel link

By Larry Teren

If you feel at home using Microsoft Excel and want your business accounting software to integrate with it, consider the Enterprise Manager your friend. Basis’ Enterprise Manager has been a welcome utility for Open Systems Accounting Software (OSAS) users since its inception a few years ago. The Enterprise Manager is included for free ever since the bbj version (java enhanced business basic) was adopted for OSAS. Continue reading “Enterprise Manager is versatile OSAS to Microsoft Excel link”

How to Apply credit memo and deposits to invoices in Open Systems Accounting Software

By Larry Teren

Whether you review an AR Aged Trial Balance or your customer reviews the printed statement you sent them, it makes sense to make sure that payments and credit memos are applied appropriately to invoices. Why? You want the invoices to be aged properly.

Notice in the example below that there are three payment records that do not match an invoice number. We can use the SPLIT/REAPPLY feature in the HOLD/RELEASES routine to reassign part of any of these three payments to any of the invoices. Continue reading “How to Apply credit memo and deposits to invoices in Open Systems Accounting Software”

How to Close out older Purchase Order in OSAS

By Larry Teren

Open System Accounting System (OSAS) Purchase Order module handles the purging of open orders differently than the Sales Order module.

In the Sales Order module, a line item in an open order that is verified and invoiced gets erased once it is posted. In other words, if a five line item order has three lines invoiced and the other two back-ordered, once posted only the remaining two are left in the order. If the entire order is invoiced and then posted, the order disappears out of the open order file. Continue reading “How to Close out older Purchase Order in OSAS”