Route accounting

A route accounting system is a business software system or ERP system that captures, records, and costs sales transactions for distributors with mobile warehouses, usually trucks, operating as direct store distributors, van sales, pre-sell, delivery confirmation.

To be a full route accounting system, the mobile systems will function under the direct or indirect control of a central accounting system. In essence it is a mobile point of sale system. A route accounting system will usually include specialized functions and reports for mobile inventory control and management, mobile device management, remote settlement systems, and management reporting.

A Route accounting system is similar to call accounting used in the hospitality industry to track phone calls. In route accounting, the tracking is of transactions and inventory in trucks usually connected with convenience store distribution, restaurant supply, and similar business situations.

Common applications of route accounting

Direct store distribution (DSD) (aka direct store delivery, van sales)

• Distributors, primarily those who serve convenience stores, will use a route accounting system to manage direct sales from their trucks to their customers, the convenience stores.
• In the course of conducting this work, the DSD enterprise will load trucks with inventory, assign route sales professionals to customer groups and send these ‘mobile warehouses’ around the route to stock the shelves, accept return goods, and create invoices at point of sale.
• The mobile side of the route accounting system may provide pricing, invoicing, inventory control, and customer information all of which may or may not be obtained from the back office ERP system. Ideally it will also act as a mobile point of sale system while also receiving payments and ROAs (customer payments on account). The transactions are usually integrated to the enterprise’s ERP system automatically.

Pre-sales

• Similar to direct store distribution, pre-sales are simply customer orders where the inventory is not yet delivered. In this mode, mobile inventory control is usually not relevant and printed transactions may or may not be important.
• The mobile side of the route accounting system may provide inventory levels in multiple supply warehouses and may also provide for both sales and pre-sales orders to be handled within the same system.
• Ideally, these orders should be submitted automatically to the back office ERP system where they are fully integrated.

Delivery confirmation (aka proof of delivery)

• Delivery confirmation provides for a way to settle previously created customer orders, pre-sales, at the mobile customer’s site. In this mode, mobile inventory control is usually relevant as is the need to print invoices.
• The mobile system may provide the ability to edit the order before closing, or the ability to put shorted items on back order.

Common features of route accounting applications

Route sales (sales staff) productivity

• Route accounting systems also gather accurate statistics as to productivity, not only of inventory items, customers and suppliers, but also customer routes and route sales staff. Information that is collected usually included time and date stamping, amount and price (with taxes) of sold products, returned products and reason for return.

Pricing rules

• A route accounting system also should offer some way to attach special price lists to a customer or customer group based on regional locations, routes, quantity breaks, or specials. There should be some method to control consistency of pricing.

Inventory control and management

• Where DSD, van sales, or delivery confirmation is a requirement, then accurate inventory control of items in the warehouse (or truck) is required. A complete route accounting system therefore will have some way to assign warehouse identification to trucks, to count and reconcile inventory, and to have a full audit trail for adjustments. These trucks are then rolling warehouses representing a point-of-sale location.

Integration

• Transactions should integrate smoothly with full audit trail to the main accounting system. Collisions, if any, need to be recorded and reconciled.

Mobile management and control

• Mobile computers, or PDAs are usually used. Since these are specialized devices, there needs to be some method for managing these devices.

Settlement systems

• Since mobile computers control and collect transactions, as in a mobile point-of-sale system, some settlement method is required.

Forms of route accounting

Call accounting capabilities can be acquired in several forms.

Fully integrated system

• Route accounting can be in the form of a fully integrated system from a single vendor. This means that the programming running on the mobile computer, the settlement system, and the back office accounting system probably share a similar development path. Further there should be some consistency in the way the system operates. For example, reprinting of an invoice in the office should match what was printed in the field.

Add-on point-of-sale or mobile sales system

• A business system can become a route accounting system with the addition of a mobile sales system. The portion of the system operating as a mobile sales system is much like a point of sale system, but able to act as a remote sales system for the office accounting system. In this mode transactions created on the mobile side may or may not integrate fully. As well, other issues can arise. For example, price rules, products, and customer information may need to be created in separate locations.

SaaS software as a service

• Route accounting software functionality can be accessed as an online software service. Software services are typically hosted by the software vendor themselves. SaaS providers often include optional levels of systems monitoring, management, and analysis services atop the route accounting software itself. SaaS solutions (also sometimes called managed service solutions or application service provider (ASP) solutions) generally provide greater operational simplicity while actually providing more software capability and greater return on investment. Like the hosted enterprise route accounting solutions, managed service providers eliminate distributed route accounting systems and with them the related management and attention required to keep multiple distributed systems operating, refreshed, and current. Like enterprise call accounting software above, SaaS is easily justified if you compare it to the total lifecycle cost of ownership for the distributed technology.