Enterprise resource planning, or ERP, can be a real lifesaver when having your own company. For one, it makes a business much more efficient and profitable than it would be without an ERP present. It can streamline different processes within the supply chain, giving management a way to make smarter and more strategic decisions.
One aspect that ERPs can be particularly helpful with is accounting. Have you considered upgrading your current accounting system to something more sophisticated? You can do just that by incorporating an ERP system into your company. If you are not yet fully convinced to make the switch, here are some ways that ERPs can help manage and improve your company’s finances.
Possibly the most critical way that makes ERP a wise choice for accounting is its ability to integrate different processes in the business. From managing manufacturing, warehouse inventory, logistics, billing, and more, ERP can combine the various data sources automatically. This makes it easier for your accounting system to collate the data from various sources and use it for its own processes.
By having ERP linked to your accounting system, it can automate accounting and financial tasks seamlessly. ERPs can streamline accounts receivable and accounts payable management, for instance. This automation also allows for quicker financial tracking. This can increase accuracy and avoid errors in accounts.
Another way that having an automated system provided by ERP can help your business is the assurance that cashflow can be continuously monitored when automating cash payments and receipts.
A Manager’s Assistant
ERP systems can also be an effective stress reliever for business managers. The software ensures that data is available to managers whenever required, which allows them to have a better idea of the bottom-line impact that decisions they make have in real-time. It helps managers accurately define budgets and allocate costs for raw materials, labor, transportation, and other overhead expenses without having to do the work manually. Being able to get a top-down view of the business’s cash flow also allows managers to identify any anomalies or pain points that need to be addressed.
Monitoring Costs and Expenses
Another service that ERP offers is tracking capabilities. You can use this to get an idea of each product’s landed costs and keep constant monitoring on your margins. Because an ERP is an automated software system, managing billing, revenue, and payments is much easier. It can also assist in tracking profits by analyzing costs, invoices, budgeting, and investments.
Manual data entry is prone to some error. Even small mistakes can cause significant problems for your accounting and financial reports. ERP systems can reduce the risk of these errors, and the extended time it will take to correct the errors, because the automated ERP software provides accurate and up-to-date information regarding your company’s finances.
Ensure Regulations Are Met
Compliance with government regulations is essential when growing a successful and reputable business. The complete integration that an ERP system provides can make sure that your company is aware of anything from vendor recalls to unusual financial activity that goes on. ERPs guarantee that various financial regulations are met, which can put the accounting department at ease when it comes to maintaining control over financial management.
Financial teams can rely on ERP software to comply with both Generally Accepted Accounting Principles (GAAP) and Generally Accepting Auditing Standards (GAAS). GAAP is a set of accounting rules that must be followed to direct how financial statements are prepared.Â At the same time, the GAAS is a set of guidelines that auditors use to conduct audits on a company’s financial records.
Detailed Financial Reports
Implementing an ERP system to your company can improve financial reports by offering a way to broaden the reports that basic accounting packages provide. These reports supply more than just financial data and monitor things like sales, cash flow projections, and growth trends to improve your business further.
Using an ERP system to report elaborate financial statements can give a comprehensive overview of your company’s standing across different departments at any given time during a reporting period. This way, you can ensure that your company achieves maximum productivity, efficiency, and accountability.
If you have been considering investing in ERP software for your business, there are many systems available on the market these days. Finding the right one for your company can take it to the next level. While accounting systems are helpful, implementing ERP software doesn’t just improve how you do your accounting, it is a system that handles all the processes of your company’s departments under one neat roof. The shift to an ERP may be the best decision you make for your business.
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