New ERP system delivers profitability
At the end of 2013, John Davey, a third generation family owned Welsh builders’ merchant, upgraded from a manual invoicing system to ERP software from Kerridge Commercial Systems (KCS).
A year later, General Manager, Rhys Davey, saw that margin and turnover had both increased significantly. He remembered, “Once we had a full year of history within our K8 solution we could see the scope of how much the software had helped us. Our turnover had risen from £1.1m to £1.5m and we were showing an increase of 2% in our gross margin. Using a manual system I think it had been easy to make mistakes in calculations plus we were always missing opportunities to increase our margin. I think the improvements were largely down to being able to work more accurately.”
John Davey has been trading for 50 years and offers a mix of lightside, heavyside and timber to an equal mix of cash and trade account customers. The company operates from one site in Bridgend where five of the 13 staff use the K8 software. With the Pencoed site running at full capacity, there are already thoughts to open a second site in the future. Rhys believes their high quality customer service is what keeps customers coming back.
One key driver to upgrade from a paper system was the time it took Rhys and his team to manually input customer invoices into the accounting system each month end. He said, “It took us seven working days each month to do this – there was paper everywhere! Also, we’d had problems with pilfering and needed a system to monitor our stock levels more closely.”
Rhys started his search for a new system simply by ‘googling’ software and speaking to other local merchants – a few of whom already used K8. He eventually invited three providers to demonstrate their systems. “K8 was in the middle of the road when it came to pricing,” explained Rhys, “but we chose it because KCS offered us a perfect hosting option and also because of the strong endorsements for K8 from other local merchants.”