ERP for the CFO: Ross Hurley from Prowler Proof Security

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Published on the 09/08/2012 | Written by MYOB

AT A GLANCE

Prowler Proof Security

INDUSTRY

Manufacturer / Exporter of security products

BUSINESS OBJECTIVE

Long term forecasting
Stock level transparency

SOLUTION

MYOB Exo

THE BENEFITS

Stock levels reduced by 30%
Forecasting up to five years
Greater debtor control
Improved tax compliance

FOR MORE INFORMATION

MYOB//
E: biggerbusiness@myob.com
NZ: 0800 696 239
AU: 1300 555 110
https://www.myob.com/

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An Exo upgrade has allowed Prowler Proof to meet the challenges of long term forecasting and address nagging issues of uncertainty around inventory…

Queensland based Prowler Proof has an annual turnover of around $9M manufacturing security products for both the Australian market and a growing export business into the United States. Being in a seasonal based industry means raw materials from China & Taiwan must be ordered months in advance of sales to ensure adequate supply. Although Prowler Proof had been well served for many years by MYOB Premier, expansion plans saw the company adopt Exo Business in 2009.

For Finance Manager Ross Hurley, meeting the challenges of long term forecasting and addressing the general uncertainty around inventory levels were two primary reasons for the company upgrading to Exo. Today, with two years of experience using the system, he says the difference in Prowler Proof’s insight into its own business is like night and day.

“I think it’s fantastic.” he says, “We’ve got a brilliant handle on exactly where we are – and the ability to predict where we’re going to be. We can plan ahead with total confidence.”

Ross identifies a number of key areas specific to his role where Exo has made a significant impact;

Inventory Management
When Prowler Proof first began importing the bulk of its raw materials from China & Taiwan, the company leased a warehouse to store it. It was then that Ross says “we discovered we really didn’t have any sort of inventory system at all.” Exo has proven a powerful tool in this regard.

“The stock movement and usage reporting we get from Exo has been invaluable in enabling us to confidently say what we’ll need in three months’ time. That’s meant we are not having to carry a lot of unnecessary stock.” Ross says at its peak Prowler Proof were holding around $1.8 million in stock – a figure that’s been reduced by around 30% since the introduction of Exo. “We’re sitting around $1.2 now – so that’s a lot of cash we’re keeping in the bank instead of tied up in stock.”

Cashflow Forecasting
With half of Prowler Proof’s annual sales occurring between October and December, Ross says the company must undertake a “very heavy overseas purchasing regime” from July through till the end of September. Prior to Exo he says planning for this spend was somewhat fraught.

Today though, that situation is completely reversed.

“Exo has made a big difference,” he says. “We’ve got cashflow now that come out exactly as Exo forecast they would. We know with confidence how much money is going to be in the bank at the end of June. We don’t have to wonder if things are right or not and we know for certain when the forecasting indicates we’ll have the cash to cover the excess purchasing.”

Taxation Compliance
Like many Australian companies, Prowler Proof is entitled to tax concessions for Research and Development expenditure. Prior to the Exo implementation, however, Ross says the process of securing those concessions was time consuming and expensive.

“It’s a very structured reporting format,” he says. “We had to hire a consultant to come in and do it all manually at the end of the year – they don’t come cheap and they also don’t have the same understanding of what’s really happening as somebody who is active in the business.”

Once Exo was in place, however, Ross says implementers EXOEBS were able to write a report to manage the entire process.

“Basically it’s allowed us to do the tax concession forms at pretty much the press of a button.”

A similar scenario occurred with reporting compliance for Prowler Proof’s ‘Commercial Ready’ government grant. “The government contribution was about $1.8 million,” he says, “but with very strict quarterly recording requirements.” Once again, EXOEBS were able to write an Exo report specifically designed to comply with the required reporting.

Ross says although he is comfortable with creating his own reports in Exo, the efficiency of EXOEBS in constructing specialised reports like these is a huge asset to the business. “They’ve been great partners and it’s a lot more cost effective to get them to do a couple of hours on something than have me take two days to build it.”

Systems Integration
The fact that Exo Business is a SQL database was a major factor in the decision to buy the system says Ross – specifically because the company could then integrate its factory software with its accounting package. Always ahead of their time, Prowler Proof has long operated a computer-controlled robotic production line. Customers initiate a production run when they place an order online, he says, but the automation previously ended at dispatch.

“We used to manually enter invoices,” says Ross, “but now that we’ve integrated Exo with the factory system all those invoices just transfer straight into Exo with no human involvement or potential for errors. It’s saved us a great deal of money and we’ve been able to take a staff member entirely out of that department.”

Debtor Control
Although the company has always maintained a watchful eye over its debtors, Ross says Exo has been able to automate the authentication process and further reduce Prowler Proof’s exposure to bad debts.

Operating on a 14 day billing cycle, the company’s ordering system has been integrated with Exo, thus when an order arrives the customer record is checked with Exo and if a previous invoice has not been paid the factory puts the new order on hold. “It’s a great integration because now we don’t have to monitor that manually. It’s saved us a lot of money in bad debts and it doesn’t require any human intervention at all.

Although most reports are analysed weekly, Ross says there’s one critical report he tracks on a daily basis. “When we went looking for a solution, inventory control drove a lot of it, but we also wanted something that was very flexible from a sales perspective – because at the end of the day that’s what everything revolves around.

I run the Exo sales analytics in the background all day and keep the MD and the sales director up to speed on whether we’re getting what we need, if we’ve fallen behind & what we need to concentrate on. In the past some of that information was available but some required you to spend days extracting data manually into spreadsheets, nowadays the data is right there up-to-the minute.”

In an economic climate that he describes as “pretty ordinary” Ross says Prowler Proof is showing continued growth where many others are “going backwards”. It’s a state of affairs, he credits, at least in part, to the clarity of forecasting Exo presents to the company’s management team. “The way we’ve been able to look at expansion and look at our growth plans, Exo has been invaluable in terms of projecting the next five years which helps us determine the best strategy going forward. I think it’s probably one of the best investments we’ve ever made.”