Fishbowl vs. Velocity

Overview

Inventory can present unique management challenges and usually represents a significant portion of an enterprise’s assets. Simple inventory operations, such as those with a single warehouse, limited part numbers, and no regulatory needs, can manage with QuickBooks alone. However, life is seldom simple and every client is unique. Over the past few years, a dozen inventory and manufacturing add-ons have been developed to meet advanced inventory management requirements. We should be aware of these products and their relative strengths and weaknesses. The focus of this article is to examine only two such products, Fishbowl 5.2 and Velocity as of the March 2008 release.

Fishbowl and Velocity are integrated add-ons for QuickBooks inventory management. They have dramatically different design concepts and goals. Velocity is a web-based application that extends the functionality of QuickBooks inventory by providing features that are not present in QuickBooks such as: multiple locations and warehouses; and Lot, Serial Number and Expiration Date tracking. Fishbowl is a stand-alone product that replaces the inventory functionality in QuickBooks but integrates for General Ledger, Accounts Receivable, and Accounts Payable purposes.

Both products have committed development teams working on enhancements and improved functionality. Accelerated development of features and improved usability over time is expected. Velocity has releases scheduled for late April and May of 2008 which address some of my concerns noted below. Fishbowl has a major release scheduled for August 2008.

Point of View

Fishbowl and Velocity were selected for this article because of their contrasting approaches to the challenges of inventory management.

Fishbowl’s additional features are extensive including an elegant sales order configurator, multiple costing choices (Standard, Weighted Average, LIFO, and FIFO), pricing and discount logic and control over the issuance and authorization of Sales and Purchase orders, to name a few. I will therefore address the functionality common to both products.

We’ve all purchased a software package loaded with features we then scrapped due to the Usability Factor. Usability is the key to success of any software package. If it is difficult to use, it won’t be used. Inventory can pose unique challenges given warehouse working conditions and user skill levels. I consider the human interface features including data validation and control to be essential.

I have provided a summary of both Fishbowl's and Velocity's functionality in Table 1 below.

Design Concept and Platform

Fishbowl is a desktop application designed to replace all of QuickBooks’ inventory functionality and to provide a business operations system that handles purchasing, receiving, inventory management, fulfillment, and shipping. Velocity is a Web based “software-as-a-service (SAAS)”application designed to integrate directly with and enhance QuickBooks’ inventory functionality. As stated by Kevin Reynolds of Velocity in the Velocity user forum “Velocity should be thought of as the Warehouse Module for QuickBooks Enterprise.”

Fishbowl users perform all of the sales, purchasing, assembly and warehousing functions within the Fishbowl product and then send inventory related transaction detail to accounts receivable, accounts payable and summary financial data to inventory, sales and cost of goods sold. With Fishbowl, QuickBooks is used only for managing non-inventory functions such as Accounts Receivable, Accounts Payable and the General Ledger.

Velocity users initiate all purchases and sales from within QuickBooks and the program takes them to Velocity for inventory functions. All receiving, shipping, inventory moves, cycle counts and assembly transactions are handled within Velocity. All reporting, except for warehouse, location and tracking remains in QuickBooks, as does all transaction detail.

Let’s walk through a sale in both Fishbowl and Velocity. A Fishbowl user first creates a sales order in Fishbowl. After issuing that sales order, the user generates a pick ticket, then a packing list as well as an invoice. Optionally you can create the final invoice in QuickBooks.

A Velocity user creates the sales order in QuickBooks and then fulfills the shipment in Velocity, which generates a Velocity Pick Ticket and QuickBooks invoice. Other paper documents such as packing lists are generated from QuickBooks using user-defined templates.

Fishbowl maintains all item detail in the Fishbowl data file. The only items necessary in the QuickBooks item list are the default Fishbowl items, various sales tax items and other non-inventory items required by the client’s business. Velocity maintains all item detail in the QuickBooks item list.

There are advantages and disadvantages to both of these approaches. As discussed below, Velocity is limited somewhat because it uses the QuickBooks item list and because all sales and purchase transactions must be done in QuickBooks where the user is limited to the capabilities of QuickBooks. However, those limitations could be considered advantages because all sales, purchasing, and reporting functions are within QuickBooks. Fishbowl’s approach completely takes over all purchasing, sales orders, and inventory reporting. Users can take advantage of the full capabilities of the Fishbowl system because all user interactions including forms for data entry are handled by Fishbowl. However, because users enter data into Fishbowl, and that data is then summarized in QuickBooks, this could be considered a disadvantage by those who believe all data should be stored in QuickBooks.

Security and Compatibility

Fishbowl can be used with QuickBooks Pro, Premier, and Enterprise. Implementing Fishbowl may negate a user’s need to upgrade to Enterprise. Fishbowl users do not need access to the QuickBooks file minimizing unauthorized access.

Velocity can only be used with QuickBooks Enterprise. Velocity has its own user security that controls authorized functions within Velocity. Access to QuickBooks file is not required for all Velocity users, but is required for all users entering sales and purchase orders. Access to financial data is governed by the roles and permissions in QuickBooks.

Cost and Technical Considerations

Assuming you have an acceptable internet connection, Velocity requires little initial expenditure. It is a web-based application with a monthly per user fee structure, currently starting at $39.95 per month per concurrent user. The QuickBooks Enterprise support team provides unlimited support. This is appealing to clients who want a minimal capital investment. A 5-user license would cost $2397 annually. However, you need to factor in adequate bandwidth, as idle personnel can be costly.

Fishbowl requires a capital investment for the required user licenses, but may have lower maintenance costs. A 5-user license is a one-time $5,795, which includes one-year of maintenance and extensive support. The cost for subsequent year maintenance and support for five users is currently $1,495. An analysis of capital and operating cash out flows needs to be done on a client-by-client basis.

Multi-Warehouse and Multi-Location Functionality

Both Fishbowl and Velocity handle multiple warehouses and locations. I like that Velocity Inventory performs both warehouse transfers and location transfers from the same screen. However, Velocity assumes that the inventory from Warehouse A is transferred to Warehouse B instantaneously, which is unrealistic unless your warehouses are right next door to each other. Fishbowl has added functionality where a transfer ticket is generated for the move, which provides both the sending and receiving warehouse with a control document and accounts for the in-transit nature of the inventory.

Fishbowl also generates move documents for location transfers within a warehouse and prints new tags corresponding to the new locations.

Assembly Builds

Fishbowl has an entire work order processing system that mimics the flow of materials in a real world environment. Work Orders are issued for the finished assembly, a work order is generated and then a pick ticket is issued to the floor. After the product is picked Fishbowl provides a user-friendly interface which issues all of the material to the job in one-step with override capabilities for quantities shorted, parts substituted, etc. The materials picked to the work order are unavailable during the build and the finished product is unavailable until the Work Order is finished thereby accounting for the time elapsed between the pick process and the finished assembly. Fishbowl also provides a disassembly work order that is extremely valuable when parts can be harvested from an existing assembly and used elsewhere.

Velocity assembly build functionality is necessary to the multiple warehouses, multiple locations and tracking functionality of Velocity. The build assembly function in Velocity calculates all the required parts and quantities and the user then selects the warehouse, location, lot or serial number assigned to that assembly. Each item in the assembly must be transacted separately using three separate screens. Substitutions and shortages are not addressed. A pick ticket is then generated for the parts required from the warehouse. Although QuickBooks assumes instantaneous building of the assembly and pulling the parts from inventory, with Velocity you can but the finished product on a “hold” status so that the product is not available for shipping until it is actually finished.

Additional Items and Charges not on the original Purchase Order

This is another area where design philosophy influences usability. Fishbowl and Velocity allow the user to receive items not on the original purchase order. The most common types of items would be shipping and handling charges, expediting charges, tooling and set-up charges and occasionally a part not ordered. Fishbowl sends these additional items and their associated cost as a bill through to QuickBooks Accounts Payable. Additionally, you have the option of expensing these costs or allocating these charges to the items on the purchase order (landed cost).

Although Velocity allows you to add these items at the time of receipt those additional items are not transferred back to QuickBooks with that item receipt. These charges need to be added to the original Purchase Order and then synchronized with Velocity before the receipt is completed to have the additional charges properly added to the item receipt. The other workflow option for these charges is to have every inventory bill reviewed and reconciled by the payables clerk.

Warehouse Documents

Large warehousing operations typically have computer workstations in receiving, shipping and at an inventory control clerk or manager’s desk. Even though warehouse personnel often use portable scanners, in my experience, paper pick tickets, work orders and transfer tickets are still needed to reference what they are pulling and for what purpose.

Fishbowl provides the ability to print all of these key documents, work orders, pick lists, transfer tickets and shipping documents. Velocity provides some of these documents currently and additional documents will be available in the upcoming releases.

The Time Factor

Fishbowl mimics the actual workflow of a warehouse operation, recognizing that picking, packing, building, and moving inventory require people, paper and time. Inventory does not magically move or build itself just because we have recorded a transaction in the software. Fishbowl provides documents and an in transit or in production status for each step in the operation. Velocity does have some of this functionality by utilizing an “on hold” status, but is limited due to the design of QuickBooks.

Control verses Tracking – Serial Numbers, Lot Numbers and Expiration Dates

Good lot and serial number control is near and dear to my heart as the former CFO of a medical device manufacturing company subject to Food and Drug Administration lot control and good manufacturing practices. No matter how careful the manufacturer, recalls are a fact of life. In the event of a recall, every component purchased or manufactured needs to be traced through the assembly to the customer in a very short period. In a FDA recall, the agency is watching for timely execution.

So let’s examine the functionality and usability of the lot-serial number features of Fishbowl and Velocity. In Fishbowl, the process starts with flagging the item to be either serial number or lot number controlled in the item master file. The item master file is also where the user can establish expiration date requirements. Once flagged for control, a lot-serial number is required for all transactions involving this item throughout the material handling process. Fishbowl requires the user to input a serial number for each unit received. For each inventory move, Fishbowl knows which serial numbers are in a given location and the user must select those available serial numbers for transfer to a new warehouse or location. Fishbowl also picks the serial numbers to ship for each sale, based upon an algorithm that selects the oldest lots or serial numbers first, and validates the expiration date if required. An important feature in both products is the ability to override the selected lots or serial numbers for what was actually picked to ship. Fishbowl also handles part revision levels in a similar manner.

In Velocity, the item master is stored in QuickBooks, which does not support lot-serial number control or expiration dates. It is left up to the user to remember that a part is subject to lot-serial number control or has an expiration date. The lot, serial number and expiration date fields are available for input on each transaction but not required. Velocity, therefore, provides tracking, but not control. Velocity controls must be manual in the form of written policies, reviews and check lists, etc. Once an item is assigned a lot-serial number in Velocity, it is visible, by warehouse and location. Similar to Fishbowl, Velocity selects the lot-serial numbers to be shipped and allows an override of the selected lots-serial numbers.

Therefore, Fishbowl has lot-serial number and expiration date control and tracking. Velocity has lot- serial number and expiration date tracking only. My testing uncovered some awkwardness in Velocity‘s lot serial number and expiration date tracking, especially in receiving. For example, let’s assume a purchase order for 10 units of a serial number controlled part with an expiration date. When received into Fishbowl, a pop up screen appears, triggered by item master that requires 10 serial numbers and expiration dates. The user must enter the 10 serial numbers and related expiration dates, not 8 not 11 but 10, before the receipt can be accepted. The serial numbers also remain on the screen so that the user can proof their data entry before accepting the transaction.

In Velocity, the user must receive each unit individually doing 10 separate receiving transactions involving up to six separate screens. What are the odds of a busy warehouse worker becoming impatient with this process? Also, Velocity will allow the part to be received into inventory without a serial number. Velocity plans a major overhaul of their serial number functionality in the May 2008 release. It will be interesting to see how the address the issues.

The Human Interface Challenge

Fishbowl has the better user interface. Fishbowl provides data validation, drop down menus, full descriptions and header information on every screen. All of which are enhancements I think Velocity needs to make to be more competitive and useable.

Amazingly, Velocity only shows the user items, including non-inventory items with positive on hand quantities. Overall, Velocity requires many more keystrokes than Fishbowl for most of the routine inventory transactions, receiving parts, issuing parts to assemblies, etc.

Best Fits

Velocity is an excellent fit for a client who is already established on QuickBooks, has existing user licenses for all personnel, and whose inventory management needs are limited to multiple locations and warehouses, minor assembly builds and cycle counting.

Velocity could also be a good fit for clients who have very small operations, such as one or two users, are price sensitive and need the enhanced capabilities of Velocity. I currently have a medical device distributor with a single user who is tracking lot numbers using custom fields on the QuickBooks invoice. They have inventory in the office closet and at a bonded warehouse. Velocity would give them an enormous increase in functionality, for a very limited investment. Although I would never recommend Velocity for someone with serious lot, serial number of expiration date control requirements, Velocity would be an enormous improvement over their current methodology.

I consider Fishbowl to be a good fit for those willing to make the investment, need more functionality and control than is offered by Velocity and any business which requires true lot, serial number and expiration date control. Fishbowl is a much more robust offering and should be considered along with the other full inventory management packages for more complex inventory needs, order configuration, shipping management, material planning, etc.

Fishbowl is a great solution for distributors of most any discrete product: equipment, packaging, boats, and auto and bicycle parts. Fishbowl’s Lot, Serial and expiration date control features are particularly important to distributors of medical devices, pharmaceuticals, electronics and other equipment requiring warranty and repair. Fishbowl is also a good solution for simple assembly operations. I’d consider Fishbowl for assembling medical devices, bicycles, custom framing, and end-user electronics but not for an operation involving fabrication, molding or compounding.

I wouldn’t consider either product for complex or process manufacturing models, such as injection molding, chemical compounding, food processing, building materials, bottling plants or agriculture.

Although both products offer some point of sale functionality, both are best suited to low volume retail such as picture framing, playground equipment, specialty stores. Eateries, apparel stores, high volume consumer goods should be addressed with a dedicated point of sales system not a warehouse management system.

Conclusion

Velocity and Fishbowl are both great products. Velocity extends the inventory functionality of QuickBooks. Fishbowl replaces the inventory functionality of QuickBooks. They both offer multiple location and warehouse functionality. They both include work order or “build assembly” processing. They both have a vehicle for cycle counts and physical inventories. Fishbowl provides lot, serial number and expiration date control and tracking while Velocity provides only tracking. Both products are continually being enhanced and will no doubt evolve dramatically over the next few years.

As consultants, we are charged with helping our clients safeguard assets and maximize the enterprise’s efficiency. Understanding the tools available enables us to recommend the best fit for increasing productivity and managing information. To that end, we should endeavor to be knowledgeable about and use these inventory management offerings.