If you run a product distribution company — food and beverage, cosmetics, pharmaceuticals, spare parts, anything that reaches customers through field reps — you already know the problem is not selling. The problem is the cycle: goods leave the warehouse in the morning, cash comes back at night, and what happens in between determines whether you made money or lost it.
Most distribution companies in Egypt run that cycle on a mix of paper books, Excel, and WhatsApp. The result is that variances surface two weeks or a month later — long after anything can be done about them.
This article walks through the full distribution cycle stage by stage, shows exactly where money leaks, and explains how the Plan on the Go module in Hunt ERP closes each gap.
Why distribution companies differ from every other sales business
In an ordinary company, stock stays in the warehouse until it is sold. In distribution, stock leaves the warehouse before it is sold, and spends a full day moving around the city inside a rep's van.
That means at any moment you hold inventory that is neither in the warehouse nor sold — it sits in a grey zone. This creates three risks that exist in no other sales model:
- Van stock — who owns the quantity currently in the van, and how do you prove that returned + sold equals loaded?
- Field cash — reps collect cash from customers on the street. That money stays with them for hours before it reaches the treasury.
- Consignment stock — goods left with a customer but not sold. Not revenue, not warehouse stock either. Where does it get recorded?
Any system that manages a distribution business without solving those three at the accounting level is a system that records outcomes rather than preventing losses.
The full distribution cycle — ten stages
1. Load request
The cycle starts with the rep, not the warehouse. The rep submits a load request with the items and quantities needed for tomorrow's route, based on their customers and sales history. It stays a draft until sent, then routes to a supervisor.
Why it matters: when the rep requests, the rep owns the choice. When the supervisor reviews, you stop slow-moving stock from being loaded onto a van that will not shift it.
2. Approval and conversion to a load order
The supervisor approves or amends the quantities. On approval the system issues a numbered load order tied to the route, the vehicle, and the source warehouse.
3. A real stock transfer into the van
This is the most important stage and the one most often done wrong. In Hunt ERP each rep's van is registered as its own warehouse, and loading happens through an actual stock transfer from the company warehouse into that van.
What changes in practice: van stock becomes a number the system computes on the books, not a paper list. You can ask at any moment what a given rep is carrying, and the answer comes from the same place your trial balance does.
4. Receipt confirmation
The rep confirms receipt of the load from their phone. From that moment the balance is their responsibility, and any shortfall at day end carries their name.
5. GPS check-in
Attendance is recorded with GPS coordinates, the reading's accuracy, and a reverse-geocoded address. A check-in from outside the assigned territory shows up in management reporting the same moment, not at month end.
6. Visits with a defined goal
Every visit is tied to a route customer and an explicit goal: sell, collect, follow up, or present a new product. The system records coordinates and timestamps for both check-in and check-out, so true time on site is documented.
If a visit ends without a sale, the rep must select a no-sale reason. Aggregated across hundreds of visits, those reasons become the most valuable report in the company — they tell you what actually blocks sales.
7. Shelf audit
Before selling, the rep photographs the customer's shelf and enters the quantity actually present per product. The system compares it against the quantity on the last invoice and computes the difference.
This deserves its own section below, because it changes how distribution is managed altogether.
8. Invoice, consignment, or return
From the same visit screen the rep does one of three things: issues a cash or credit invoice, leaves consignment stock if the customer holds an approved consignment authorization with a credit limit, or accepts a return. Each of them deducts from van stock in real time.
9. Collection with approval
Collections are recorded with a receipt number, the coordinates of the location, and an attached receipt photo, and accept treasury, bank, or electronic wallet with a reference number. Critically, a collection stays pending until a supervisor approves it — and rejecting one requires a written reason.
10. Day close and settlement
At day end the system computes expected cash from its three sources, compares it to the amount the rep declared, and produces the variance as a clear number. A day cannot close with an open variance. After approval, settlement is booked to a treasury or bank under a settlement number, and the system generates the accounting journal entry automatically.
The three places distribution companies lose money
One: van stock
If van stock is not a real warehouse in the system, you do not know what is on the street right now. The gap shows up in the monthly count as a "shortage" with no way to tell when it happened or with whom.
When the van is a warehouse, every item leaves it on an invoice, a consignment note, or a return, and the remaining balance is reconciled against the physical count at day end. The variance appears the same day.
Two: end-of-day cash
The most common leak in distribution. The rep comes back with an amount and the accountant takes it. Who calculated what should have come back?
The correct calculation is:
- Cash sales for the day
- + value of consignment converted to sales
- + collections from credit customers
- = expected cash
The system computes that automatically and compares it to what was declared. The variance is recorded and needs supervisor approval with a written note. There is no "it's small, leave it".
Three: consignment stock
In most companies consignment lives in a notebook. That creates two problems: you do not know the consignment balance per customer, and you cannot calculate true profit.
In Hunt ERP consignment is a full accounting subsystem: goods leave on an issue note and journal entry without being booked as revenue, and profit is held as deferred profit until the customer actually sells. Each customer carries a consignment balance per product, with sold and returned quantities tracked separately.
And no one can leave consignment stock with a customer without an approved authorization carrying a credit limit — the exposure is controlled before it happens, not after.
Shelf audit: the difference between "I shipped" and "they sold"
Most distribution companies measure success by the quantity they shipped. That is a misleading metric, because the goods may be sitting unsold in the customer's stockroom.
The shelf audit resolves this simply: on every visit the rep photographs the shelf and records the quantity present, and the system compares it to the last invoice quantity. The gap between the two is true sell-through.
Accumulated over months, that data tells you:
- Which customers stockpile rather than sell — so you stop shipping before a large return comes back
- Which products stall in one territory while moving in another
- Which reps push customers into quantities they cannot shift
- How long a product genuinely takes to move at each customer type
And the shelf photo itself becomes documented evidence attached to the visit — not a claim in a report.
The metrics you should watch daily
| Metric | What it measures | Why it matters |
|---|---|---|
| Visit completion rate | Actual visits ÷ planned route visits | Exposes reps skipping customers |
| Productive visit rate | Visits that produced an invoice | Separates reps who visit from reps who sell |
| No-sale reasons | Classification of unproductive visits | Tells you whether it is price, availability, or a competitor |
| Shelf sell-through | Actually sold ÷ shipped | Prevents stockpiling at customers |
| Daily cash variance | Expected minus declared | Early warning signal for any leak |
| Consignment ageing | How long goods sit with a customer | Identifies customers needing settlement |
| Target attainment | Sales, visits, new customers, collections | A fair basis for commission |
Targets and commission: base incentives on system numbers
The problem with commission in distribution is that it is usually calculated on sales alone. The result is that reps focus on the big existing account and neglect opening new customers and collecting receivables.
The fix is a four-dimensional target: sales, visits, new customers, and collections — over daily, weekly, or monthly periods. And commission with two rates: one for route customers and a higher one for new customers, plus a bonus for crossing a defined threshold.
All of it is computed from the system's own transactions, so there is no argument about the numbers at month end.
How to start
The sequence that works for most distribution companies:
- Register routes and customers with their coordinates — everything else builds on this
- Make each rep's van a warehouse and start loading through real stock transfers
- Turn on day close with variance calculation in week one — this is what stops the leak
- Add the shelf audit once reps are comfortable with visits
- Move consignment into the system with authorizations and credit limits
- Enable targets and commission last, once the data is clean
Full deployment takes weeks rather than months, because the module is part of Hunt ERP rather than a separate system that needs integration.
The bottom line
A distribution company rarely loses money on one large bad deal. It loses money in small daily gaps: an item missing from the van, a minor cash difference, forgotten consignment stock, a customer quietly stockpiling. Each is small on its own; across a year they add up to a serious number.
The answer is not tighter surveillance of reps. The answer is a closed cycle: every movement leaves a record, every figure is computed from its source, and every variance surfaces the same day instead of at month end.
If you want to see Plan on the Go running on your own data, request a quote and our team will arrange a demo on a real route from your operation.
Ready to see your company reports done right? Request a custom quote or start with a free trial .