While pastoral images and pictures of farmland often suggest a kind of quiet peace, anyone who’s worked a farm or ranch knows that, most days, it’s far from tranquil; there are just so many moving parts. At any given moment, one might be pulled in a different direction to handle evolving situations or address pressing needs.
But, what if there was a tool to help manage all those moving parts, including outside vendors and suppliers, ensuring that supply needs are met in a way that saves both time and money? Farm ERP software is designed to do just that, including helping with vendor management.
- What is Vendor Management?
- Why is Vendor Management Important for Farm Accounting?
- What is Farm ERP Software?
- How ERP Software Supports Farm Vendor Management
What is Vendor Management?
Vendor or supplier management is the process and strategy used by farms and ranches to manage their supply chain and customer relationships. This means proactively monitoring all of the individuals and businesses that supply goods or services to your operation as well as those who purchase your products.
It’s more than just keeping track of who provides what and when. Optimized vendor management through a farm ERP solution can improve your bottom line by saving you time and money.
Why is Vendor Management Important for Farm Accounting?
While relationship building is great, and vendor management ensures your operations have all the supplies they need, efficient and effective vendor management also saves you time and money.
In fact, vendor management allows your operation to monitor and control costs by evaluating, in real time, product supply and use as well as the costs associated. No more time consuming inventory and stock taking. Instead, seed, chemicals, fertilizer, and fuel suppliers provide electronic invoices and delivery tickets and you can track inputs by farm, crop, field, and group. All supplies and production are based on real time data. As a result, you reduce overspending while ensuring accurate allocation of inputs and revenues.
When it comes to farm accounting, being connected to vendor transactions is vital for:
- Real-time, detailed updates of input orders, deliveries, invoices, and inventories
- Securing loans from lenders who require accurate financial data
- Data-driven strategy and financial forecasting
- Tracking expenses and monitoring cost and profit centers
- Complying with purchase and sale contract specifications
- Automating, replicating, and scaling business processes
While vendor management is overlooked by some as a back office task, it plays a far more important role in farm management and financial health.
What is Farm ERP Software?
Enterprise Resource Planning (ERP) software allows businesses and organizations to get a bird’s eye view of all operations and analyze the ways in which those operations are interconnected.
For farms, that means ERP software can provide real time data on all your operations from animal feed to crop seed and enables you to make strategic decisions based on that information. Rather than moving from application to application or aggregating data in one place, both time consuming tasks, ERP software pulls the data you need in one location, simplifying tasks and planning while saving you time.
How ERP Software Supports Farm Vendor Management
Vendor management, as mentioned, is about more than relationship management. It also comes down to detailed supply chain and product delivery management. Are you getting what you need, when you need it, where you need it, for a price that fits your budget? Similarly, what product specifications and delivery schedule will be most profitable in the current market?
In order to answer any of those questions, you need to manage and monitor your own inventories to make sure you’re adjusting to the market, but you also want to have that data on hand to ensure you're considering the impact on farm profitability. To do that requires data.
In the past, gathering that data and managing your inventory and supply while tracking sales was complicated and time consuming. Farm ERP software bundles all of this data in one place which is increasingly important if there are multiple locations or sites being managed. Track, monitor, adjust, report, and plan all in one place.
Finally, when it comes to resource utilization, properly managing vendor relationships means ensuring you have the supplies you need when you need them and nothing goes to waste. A Farm ERP solution means both invoices and inventories are electronically updated and you can adjust, as needed, to fluctuating markets.
Developments in ag tech mean your ERP software is constantly receiving real-time data about conditions in barns and in the fields that allow you to adjust supplies on the fly and shift your strategy to meet market demands. This means you can build responsive vendor relationships while ensuring consistent production. While all aspects of farming are impacted by changing conditions, your income need not be.
If you’re ready to talk about how a Farm ERP solution can improve vendor management, supply lines, and improve your bottom line, reach out to the FBS Systems team today and let’s get started!