Michel Storken leads and manages Burkland’s inventory accounting group. Michel and his team are instrumental in helping Burkand’s startup clients in the consumer sector with their inventory challenges.
A Q&A with Michel Storken, Practice Lead – Burkland’s Accounting Inventory Group
Why is inventory management so critical for startups?
Inventory management provides vital information when managing and growing a startup. Having the right tracking and processes around your inventory ensures easy and correct access to your inventory levels which are critical to effective manufacturing and sales. Your system should interface effectively and accurately with purchasing, receipting, usage, and with sales. Your system also drives accurate Cost of Goods calculations and profit reporting. And every startup knows, this is vital for investors and for raising money.
How does inventory management impact a startup’s cash position?
Cash is directly tied to controlling inventory levels. If you have a strong inventory system and accounting in place this will streamline your purchasing and minimize cash used in inventory holdings. Inventory management also gives founders and their executive team the information needed to improve decision-making around suppliers, product development, market expansion, and financial planning. If you use a customized and scalable inventory system a startup can also avoid the substantial expense of a major ERP which saves a lot of cash.
What kinds of problems can occur if a startup does not have a good system around inventory?
- Operational inefficiencies due to lost inventory, stock shortages, excess stockholdings or incorrect product purchasing
- Financial impacts including inaccurate COGS calculations and Profit reporting – no startup wants to be in this position!
- Quality/warranty costs from an inability to track inventory and supplier data
- Poor purchasing outcomes including double payment of bills or missing out on payment discounts
Most startups use low-cost inventory systems when they are scaling. These systems are cost-effective but don’t always provide the cash management function that could be beneficial. Burkland is able to identify the important processes required to be captured depending on the stage of the business, and matching this with software and processes that provide the required features. By intimately understanding your business we can guide your growth to scale through increasingly complex iterations of systems as the demand of the business grows. In this way, we can ensure that reporting for cash management is factored into the capture and flow of transactions.
What do you and your team at Burkland offer startup clients around inventory?
- We provide guidance on implementing scalable inventory systems – we are key in helping our clients determine what will grow with them and meet long-term needs.
- We also pride ourselves on recommending cost-effective solutions since cash is so critical for startups.
- We develop processes for our clients that align with their operational resources.
- Inventory management depends on accurate accounting solutions and this is an area where Burkland excels. Our recommended accounting processes are designed to utilize existing staff reducing the need for training and management of internal finance staff.
- Our clients also have access and information around the full suite of Burkland services – this includes CFO, tax, and people operations resources.
- Most importantly, our clients can focus on growing their business.
Burkland is unique because we have a dynamic hybrid pricing and service model that focuses on personalized service assisting clients through growth phases and we provide ongoing account management with low-cost high-value solutions. We are also proactive – we fully understand the trajectory of growth. We suggest improvements preceding the need rather than after the fact.
Michel and his Burkland inventory team are able to help clients determine what their future inventory needs will be, and then recommend, implement and manage the systems and processes to make inventory more efficient and seamless. Inventory tracking is critical for cash strategies and meeting demand. Using Burkland, a startup can leverage a high level of expertise on an as-needed basis, reducing costs. There is also a higher level of quality control since Burkland employs a multi-level internal review process. Michel and his team make sure the stress of inventory challenges do not keep founders up at night, removing the burden from clients’ executive teams, so they can keep their focus elsewhere. To learn more contact us.