■ Accounting
Continued From Page 8
ended, a bidding war ensued. Lesson learned. I
advise clients to establish a network of supply
sources. If goods primarily come from China,
find alternatives—Mexico and Canada are close
enough to reach by road in times of emergency.
Of course, there’s no place like home, so my
mantra is…don’t rule out the United States Yes,
the cost of home goods may be higher, but not
nearly as high as the cost involved when business
stops because no one planned for one of
those inevitable rainy days. The bottom line—always
have a minimum of three different supply
chains in different geographical locations to
make sure your company is ready for the future.
Grassi
By Michael A. Violano,
CPA, MST,
Partner, Manufacturing &
Distribution Practice
A best practice I recommend to
manufacturers is diversifying the
vendors in their supply chain across multiple regions.
The COVID‐19 world has shown us just
how important this strategy is, but it’s also crucial
in times of political unrest, natural disasters
or other crises that cause disruption in one part
of the world. If raw materials or manufactured
goods are only sourced from one country, the
client should find two or three vendors there to
mitigate the dependency risk. Assessing a supply
chain and evaluating new options should take
several factors into consideration. Low cost alone
is not enough if the shipment takes too long to
arrive, whereas quick delivery may not offset
high costs. Manufacturers should take a holistic
view of the entire supply chain performance—
from quality and cost to timeliness and lead
time—to determine how well the supply chain is
functioning and which links to strengthen.
Marcum is advising retail
and manufacturing clients
to work together to get things
back on track.
Klatzkin
By John Blake,
CPA, MBA, Partner
One supply chain strategy
that we advise our clients on is
whether their system allows for
accurate and timely data and information.
Having real-time information available
is key to the decision-making process and
enables the business owner to make expedient
changes. We also encourage clients to standardize
as much as possible to increase efficiency.
Another area that we review with clients, especially
due to the COVID‐19 pandemic, evaluates
their vendor performance. The company can
only operate as efficiently as their vendors will
allow, and many supply chains have been interrupted
or broken due to COVID‐19, so finding
new vendors may be necessary. Finally, we will
typically review the client's cash flow and offer
strategies to reduce the cycle time. This is even
more important due to the COVID‐19 pandemic
when many companies are short on cash.
Marcum LLP
By Ronald Friedman,
CPA, Partner, National
Co‐Leader, Retail & Consumer
Products Group
With no cash coming in the
door, many brick-and-mortar
retailers turned to online sales, but few could
generate enough revenue this way to cover ongoing
expenses. Most retailers advised their suppliers
they would need anywhere from 90 to 120
extra days to pay current and past due bills. All
open orders were cancelled, and suppliers were
advised not to ship without approvals. Marcum
Continued On Page 14
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