When you hear the term “ERP systems,” production, inventory and quality may come to mind. Few of us would consider financial records or variances because we don’t tend to make the connection between an ERP system and the benefits offered to the company’s financial management system.
While an ERP system helps improve departmental productivity and effectiveness, it also offers tools to improve and simplify a company’s finances. Implementing an ERP system into your company can improve:
- Financial statements and reporting
- Asset management
- Cash flow
- Adhoc analysis
- All back-office financial management processes
Companies can ensure that they’re achieving maximum efficiency, accountability, and productivity which in turn, gives a maximum return of investment. Information can be supplied to ledgers, employee journals, financial statements, and expense reports as transactions occur. The process continues to report comprehensive financial statements that give a complete overview of the company’s standing at any time in the reporting period. The result? Sales, growth trends and measurable data that facilitates improvement.
ERP systems provide the ability for better visibility to asset management. These assets can take the form of buildings, machinery, electronic equipment, office furnishings, and assets you build. Customized tracking and reporting is valuable when considering purchase value, quantity and other relevant information. You obtain improved asset accountability and reduced risk of loss because you now have more timely and efficient inventorying methods eliminating hidden costs and inefficiencies. Better visibility and more control of assets helps you avoid wasting money on unnecessary capital expenditures for resources that you already own and that can be reallocated. In addition, tracking assets that have reached the limit of their utility and tracking where you have high inventory with low usage can provide companies with immediate savings.
An automated system with consolidated data gets cash in the door faster to support the expenses that you need to pay. The ERP system will allow you to automate cash payments and receipts by using electronic withdrawal and automatic deposit. This decreases the need for paper invoices and checks and helps track collections over time, keeping tabs on account receivables and allowing you to be more proactive with slow payers. This streamlined supply chain process keeps inventory levels minimized with just-in-time practices, helping to reduce the cash tied up in excess stock. By using the consolidated data delivered by an ERP system, you can monitor all cash flow. By understanding the cash position over time, you can then make smart decisions across all levels of your business: marketing, inventory, customer credit limits, discounts, and payment terms.
Another great feature to an ERP system is that it collects the production and operational data of the business. Analytical models and reports can be built and used to provide detailed, real-time insight about finances and operations across the entire enterprise. This visibility feature allows departments and teams to quickly gather all pertinent data and respond quickly to possible changes. Budget and forecasting tools are also convenient when tracking inventory and looking at records from previous sales. Using the ERP features to build and share reports delivers insight directly to your teams, rather than relying on integrations with third-party analytical tools to provide the answers. Internal reporting helps financial decision-makers when collaborating and developing plans of action based on the same, shared perspective.
ERP systems allow instant visibility into data for accounting, budgeting, financial reporting, sales, order management, and billing, all of which can be used by all levels of management to make better decisions. For more information about Revolution Group’s ERP practice, give us a call at 614-212-1111.