Operations/Cin7 SOP Review

Cin7 SOP Review

Tuesday, March 17, 2026 — Month-end SOP, B2B invoicing, inventory reconciliation

Action Items

6 high priority

Open

In Progress

Done

Issues Found

1 resolved

$300K Resolution Tracker

Two separate $300K issues identified in this meeting — consolidated here with next steps

In Progress

Issue 1: $300K Inventory Variance (FG + Kapz)

Feb month-end: Saddle Creek physical count exceeded Cin7 by ~$300K. Two root causes — (a) missed receiving entries for goods already at Saddle Creek, (b) Kapz label/master case costs misclassified since 2025 (expensed instead of added to COGS as raw materials).

Next Steps

Pull Feb stock adjustment report from Cin7 — break down $300K FG variance by SKU to identify which items were at Saddle Creek but not booked

Grady KrohmanDue: Before March close

Cross-reference Saddle Creek receiving logs against Cin7 purchase orders for Feb — identify which POs were physically received but not entered in Cin7

Grady KrohmanDue: Before March closeBlocked by: ns-1

Pull all Kapz-related invoices (labels, master cases) from 2025 to present — quantify how much was expensed vs. should have been raw materials added to COGS

Radik AbramovDue: Before March close

Reclassify Kapz costs in chart of accounts — labels and master cases move from expense to raw materials / COGS

Radik AbramovDue: Before March closeBlocked by: ns-3

Verify Cin7 chart of accounts mapping — confirm inventory asset accounts do not flow directly into income statement

Radik AbramovDue: Before March close

Implement weekly Cin7 ↔ Saddle Creek inventory reconciliation — compare Cin7 on-hand vs. Saddle Creek WMS report, flag variances > $5K

Grady KrohmanDue: Weekly starting this week

Present root cause analysis to Martha and Radik — quantify: (a) missed receiving entries, (b) Kapz misclassification, (c) any remaining unexplained gap

Grady KrohmanDue: Before March closeBlocked by: ns-1,ns-2

In Progress

Issue 2: ~$300K Sales Reporting Variance (Separate)

Feb gross sales at ~$3.9M, but ~$300K gap vs. expectations driven by inconsistent gross vs. net reporting. Discounts and promos not clearly netted. Not related to the inventory variance above.

Next Steps

Define standard reporting basis — document whether dashboards and month-end reports show gross or net sales, and where discounts/promos are netted

Radik AbramovDue: Before March close

Reconcile Feb gross ($3.9M) to net — itemize discount categories (trade promos, volume, returns) to explain the ~$300K delta

Marie Sue DunifonDue: Before March close

Align Cin7 sales reports and QBO reports on the same basis — ensure month-end package has both gross and net clearly labeled

Radik AbramovDue: March close package

Attendees

Jackie Cheung(Sales Ops / Cin7 Order Entry)

MSD

Marie Sue Dunifon(Fisco / Invoicing & AR)

Radik Abramov(Financial Ops / Reconciliation)

Grady Krohman(Supply Chain / Production Coord)

Martha Vargas(Ops Excellence)

Collin Sparks(Ops Analyst)

Miruna Muntean(Operations)

John Kelley(Supply Chain Director)

Amish Patel(Operations)

Issues Identified

ResolvedInvoicing

B2B invoice date lagging ship date by up to 7 days

Root CauseGrady performing pick/pack/ship weekly in Cin7 instead of daily. Marie Sue's team can't invoice until shipment is confirmed in Cin7.

ResolutionJackie will execute pick/pack/ship daily when entering orders. Already confirms Saddle Creek ship date.

In ProgressReconciliation$300K

$300K inventory variance — FG count mismatch + Kapz cost misclassification

Root CauseTwo contributing factors: (1) Saddle Creek physical count was higher than Cin7 — likely missed receiving entries or goods at Saddle Creek not booked in Cin7. (2) Kapz cost classification error dating to 2025 — labels and master case costs were not classified as raw materials, so they were excluded from COGS of Kapz inventory, undervaluing Kapz on the balance sheet.

ResolutionGrady investigating FG variance by SKU. Kapz invoices being pulled back to 2025 for reclassification. Weekly Cin7 ↔ Saddle Creek reconciliation implemented going forward.

In ProgressOrder Flow

Duplicate orders in Cin7 from Shopify tagging errors

Root CauseIf an order is tagged incorrectly in Shopify (e.g., tagged retail when it should be a term sale), it auto-imports AND gets manually entered by Jackie.

ResolutionWeekly duplicate check using Fisco report filtering by B2B/PO reference number.

OpenOrder Flow

No B2B tracking numbers in Cin7

Root CauseD2C orders synced from Shopify include tracking, but B2B term orders entered manually do not.

ResolutionFuture automation via SPS connection. Manual workaround for now.

In ProgressReporting~$300K

Sales reporting variance ~$300K (separate from inventory variance)

Root CauseFeb gross sales report showed ~$3.9M. Apparent ~$300K variance driven by confusion over gross vs. net reporting basis — discounts, promos, and returns not consistently netted.

ResolutionClarified: current report is gross sales. Team aligning on consistent gross vs. net reporting standard. Not related to the $300K inventory variance (pi-2).

Key Decisions (6)

Daily pick/pack/ship in Cin7 for B2B orders

Grady was doing pick/pack/ship weekly, causing invoice date to lag ship date by up to 7 days. Jackie already confirms Saddle Creek ship date when entering orders.

Impact: Invoices now generated same-day as shipment. Eliminates ship-date / invoice-date mismatch. Marie Sue can invoice daily.

Only high-cost marketing materials inventoried in Cin7

Low-cost trade items (wobblers, pamphlets) add reconciliation overhead with minimal financial impact. Only displays and refrigerators warrant balance sheet tracking.

Impact: Reduces Cin7 reconciliation scope. Low-cost items expensed immediately to marketing.

Non-tracked items entered in Cin7 at $0 cost

Items like wobblers still need to flow through Cin7 for fulfillment even if not inventory-tracked. Zero cost prevents COGS distortion.

Impact: Prevents fulfillment gaps for non-tracked items. Needs Cin7 item master cleanup.

Weekly Cin7 ↔ Saddle Creek inventory reconciliation

Feb month-end showed $300K FG variance — Saddle Creek count was higher than Cin7, likely due to missed receiving entries.

Impact: Catches variances weekly instead of at month-end. Reduces close surprises.

Shopify "WH" tag excludes orders from Cin7 sync

Wholesale sample orders tagged "WH" in Shopify should go directly to marketing expense, not through Cin7 inventory/COGS flow.

Impact: Prevents duplicate entries and incorrect COGS recognition for marketing samples.

PO attached to every invoice sent to customers

Customers like Core-Mark need PO reference for their AP processing. Marie Sue's team is now uploading POs to Cin7.

Impact: Faster customer payment processing. Fewer invoice disputes.

Action Items by Owner (11 total)

Jackie Cheung

(3 items)

Execute pick/pack/ship daily in Cin7 when entering B2B orders (after Saddle Creek shipping confirmation)

OpenImmediate — start this weekInvoicing

Confirm with sales team which email address to CC on invoice emails

OpenThis weekInvoicing

Create edit log for B2B term orders modified in Shopify (occurs ~1-2x/week)

OpenThis weekOrder Flow

Grady Krohman

(3 items)

Train Jackie on bulk pick/pack/ship workflow for batch order entry

OpenThis weekInvoicing

Check stock adjustment details by SKU for Feb $300K FG variance — identify what was in transit but not booked in Cin7

OpenBefore March closeReconciliation

Finalize scrapping process for disposal inventory currently on reserve

OpenOngoingInventory

MSD

Marie Sue Dunifon

(2 items)

Verify auto-reminder settings in QuickBooks; ensure Cin7 and QBO email contacts are correct and aligned (especially Core-Mark)

OpenBefore March closeAccounts Receivable

Request Fisco report filtering by B2B / PO reference number to identify duplicates weekly

OpenWeekly cadenceReconciliation

Ops Team

(2 items)

Create Slack notification workflow: alert Jackie when a B2B term Shopify order is edited

OpenThis weekOrder Flow

Review and clean up Kapz cost classification — labels and master cases should be raw materials added to COGS, not standalone expenses (dates back to 2025)

OpenBefore March closeReconciliation

Radik Abramov

(1 items)

Verify Cin7 chart of accounts mapping — ensure inventory assets do not flow directly into income statement

OpenBefore March closeReconciliation

B2B Order Flow (Documented)

End-to-end B2B term order flow as confirmed in this meeting. PO receipt → Shopify → Saddle Creek → Cin7 → Invoice → Payment.

PO Received

Via email or SPS from customer

Sales / Jackie

Enter in Shopify

Within 24 hours of PO receipt

Jackie Cheung

Saddle Creek Fulfills

Within 24 hours of Shopify entry

Saddle Creek 3PL

Ship Confirmation

Saddle Creek confirms shipment date

Saddle Creek 3PL

Enter in Cin7

Jackie enters order using SC ship date, executes pick/pack/ship

Jackie Cheung

Invoice Generated

Marie Sue's team invoices daily after Cin7 shipment confirmation

Marie Sue / Fisco

Invoice Sent

With PO attached, CC to sales ops email

Marie Sue / Fisco

Payment & AR

Overdue reminders via QuickBooks

Marie Sue / Radik

Transcript Review Notes

Cross-referenced Gemini's meeting notes against the full transcript. Corrections below:

Gemini said: Gemini wrote "3.9B" for gross sales figure

Correction: Actual figure is ~$3.9M (million), not billion. Context: CPG company, B2B + D2C.

Gemini said: Gemini consistently wrote "Sin7" throughout the summary

Correction: Correct spelling is "Cin7" — the inventory management system.

Gemini said: Gemini attributed $300K variance to "finished goods quantity adjustment"

Correction: Accurate — Marie Sue confirmed Feb $300K was FG quantity adjustment. Saddle Creek count higher than Cin7. Separate from Kapz classification issue (also $300K range, dating to 2025).

Gemini said: "Cappuccino Conference Room" listed as a speaker

Correction: This is the conference room mic picking up an in-person attendee — likely Radik or another in-room participant, not a separate person.

Next review: Before March month-end closeBack to OpsO2C PipelineInventory