R.A.S. Logistics Inc. was founded in 1998 as an appliance installation firm in Milwaukee, Wis. The company’s business changed dramatically just three years later when GE won the supply chain contract to deliver appliances for Home Depot. GE tapped R.A.S. to handle delivery and installation of its washers, dryers and refrigerators to Home Depot’s customer’s homes.
“As Home Depot grew, R.A.S. grew,” says Glenn Pearson CFO. Other large customers also turned to R.A.S. for deliveries, including Wayfair, Restoration Hardware and Mattress Firm, among others. Soon R.A.S. was delivering furniture, spas, mattresses and exercise equipment.
The company grew from its single location to 21 locations, all east of the Mississippi. Today, R.A.S. is headquartered in Elkhart, Indiana. Each of the locations was a separate legal entity and as such an operational silo. Unfortunately, its financial system, QuickBooks, couldn’t handle the needs of what had become a more than $40 million in sales company.
“QuickBooks wasn’t conducive to handling the consolidated financial statements for all our various legal entities,” explains Pearson. “Very few of our accounting functions were integrated and our accounting functions were manual and very labor intensive.”
R.A.S. used a custom SQL database program to invoice its customers. It wasn’t connected to QuickBooks; information had to be manually input into QuickBooks.
R.A.S. uses 200 to 300 independent contractors to perform the deliveries. R.A.S. used a third party to handle independent contractor payments, which added another manual layer of complexity. Further complicating payments to independent contractors was a program with Enterprise Truck Sales whereby R.A.S. would financially help the independent contractor secure its delivery truck, and then deduct the rental payments for the vehicle from the revenue of the deliveries. Ultimately remitting that payment from the independent contractor directly to Enterprise.
Accounting labor intensive
“Everything was done manually,” Pearson explains. “We’d get a bill from Enterprise, enter it in QuickBooks, and then manually have to track it, saying this bill goes to John Smith contractor, and then manually track that Smith is owed $1,000 but he also still owes $500 to Enterprise. That process was very labor intensive for accounting.”
The entire 7-person accounting team worked nights and weekends to manually process paperwork from the various systems because the contractors were paid on a weekly basis. R.A.S. Logistics spent hours trying to reconcile data from multiple sources, eliminate duplicates and auditing to make sure the numbers were correct. Vacations were hard to schedule, weekend plans often had to be suspended, and the cycle repeated itself every Tuesday.
The nature of this manual process meant that Pearson had to grow personnel as R.A.S. grew locations and increased transactions. When QuickBooks started to have data integrity issues and the system crashed more frequently, Pearson knew he needed a better solution.