Stock, Lock and Barrel

By SmallBusinessComputing Staff | Posted April 01, 2000
by David Schloss

When Barfield, Murphy, Shank, & Smith, PC, an accounting firm in Birmingham, Ala., opened its doors eight years ago, it employed just 10 full-time professionals. As of three years ago, the company had swelled to 25, and now a staff of 50 serves more than 1,200 clients and generates enough business to necessitate weekly supply purchases.

Ordering office supplies might seem like the least of their worries, but managing the supply needs of 50 CPAs and administrators used to be very time consuming for firm administrator David King and one member of his staff. Between comparison shopping for the best prices and trying to keep a lid on over-ordering, they had their hands full.

"At one point, I shopped around to a few different places, like Corporate Express, Office Depot, or a local office-supply store," says King. "I would try to find the best prices, as well as the best availability."

Placing orders was equally complicated. "For some of [the companies] we would just fax an order, sometimes we'd have to actually go to Office Depot, depending on what the product was, and how quickly we needed it," he says. "But generally, we would just flip through the catalogs, fill out the order forms by hand, fax it to them, and wait for [the supplies] to be delivered the next day or so."

The tedium of ordering materials changed for King 7 months ago when Don Murphy, a partner at the firm, ran into Works.com proprietor Duncan VanDeusen while on vacation. VanDeusen started chatting with Murphy, and soon pitched his company's e-commerce project.

VanDeusen explained Works.com saves its clients money with simple volume purchasing power. Small businesses traditionally have had to purchase supplies at retail prices, but by pooling its clients' resources and negotiating volume discounts straight from product manufacturers on their behalf, Works.com is able to offer savings of up to 30 percent on more than 20,000 products.

Murphy passed the information along to King, who, at first, was skeptical. "Duncan called me and explained the process," he says. "I was interested because of their purchase order system, but I was skeptical about their great savings, and the type of items I would be getting. Duncan offered to take some of my historical invoices that covered a lot of typical items and do price comparisons. He showed me a pretty good savings on those."

EASY DOES IT
It wasn't just the savings that sold King, but the ease of ordering. There are other online ordering sites ­ Staples.com, OfficeDepot.com, and OfficeMax.com, to name a few ­ but Works.com takes a unique approach to supply management. In addition to the typical e-commerce functions of searching and browsing, it also offers companies customizable "cabinets" that store a customer's repeat purchase supplies. Any product can be put into a cabinet, allowing for any commonly ordered items to be replenished in one step, rather than requiring a customer to hunt through the Web site to reorder a box of pens.

"They offered to help us set up our cabinets with all the items that we had on the invoice," King says of their customer service, but he passed on the offer. "So that the ladies who do the ordering could get used to the system, I had them go in and set up the cabinets themselves."

The process of configuring the system took very little time, and soon the firm began to place volume orders. "In about three weeks we were ordering most everything from there," King says. The site also allows the company to set up purchasing rules, which allows different employees to request materials. King approves their requests on line.

Works.com even enables an administrator to authorize certain employees to make purchases ­ usually with a limitation on item cost ­ without administrator approval, a function King has yet to use. "As we grow, I have people who say 'I like this' or 'can you order me that,' " he explains. "We would have a bunch of little things that would trickle in here and there, and I would wonder 'why did we order that?' "

For now he takes the employee requests and looks up products on the site, eliminating costly orders of products already in stock and items that aren't really necessary.

King envisions eventually opening up the purchasing process to more people as time goes on, and Works.com will easily accommodate that change. Of the features he does use now, he is especially fond of the ability to verify items on line before committing to them. And if an unfamiliar product is ordered, he can view its picture on line.

"Without really any effort, the technology shows exactly what we're ordering, and if I have a question about it, I can pull it up in a couple of clicks and access the picture to see what it's for," says King. "There are so many items out there, sometimes you don't know if a pen is a pen. Now once it has gone through the approval process, it's on file."

TIME AND MONEY
The firm has already seen the switch pay off, and as the volume increases, so do the savings. King estimates that the firm purchases nearly 95 percent of their supplies from the site. They still shop for products such as furniture and some accounting-specific products locally, but turn to Works.com for almost everything else.

The company has yet to do a statistical analysis of the savings, but has spot-checked many items, and has seen the outflow spent for supplies steadily decrease. "I've checked some prices," King enthuses, "and I can look at the big picture and know that we're spending much less than we were before ­ especially on big items."

He can also look at one single item ­ paper ­ and see that the switch has been well worth it. Like any accounting firm, Barfield, Murphy, Shank, & Smith goes through a lot of paper. "That's an item where I had no allegiance to any vendor here in town," says King. "I shopped paper, and any time I found a good offer, I would buy as much as I could store, because it's such an expensive item."

The prices at Works.com were significantly lower than anything else in Birmingham, so low in fact that the savings on paper alone justified the switch.

But money isn't the only thing the firm is saving, it is also seeing a windfall on time that used to be spent processing the orders. The ordering responsibilities at the firm fall to the firm's bookkeeper Tonya Glidewell and to Amy Gattis, a part-time administrator. Previously the two spent a large amount of time just staying in contact with local vendors. About the time the company switched to their e-commerce solution, they added another administrative assistant. The combination allows Gettis to perform many of the purchasing functions from her home.

Best of all, King and his staff have not had to sacrifice customer service for speed and savings. If they need human contact to solve a problem, they can turn to live humans, and they feel they have a personal relationship with the folks at customer support ­ which is important when it comes to spending the firm's money.

In the year since Barfield, Murphy, Shank, & Smith automated supply purchasing, they have seen no shortcomings in the new system, and King knows that the service and savings will keep up with the rapidly growing firm.

Now if only he could keep his old vendors from clogging his mail box every week with those darned printed supply catalogs, he's be set.

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