ERP & FINANCIAL MANAGEMENT
As more ERP systems are integrating into the cloud, companies are gaining increased value in overall enterprise management systems. ERPs allow your company to coordinate and integrate with a variety of enterprise cloud applications, analytics, inventory, and warehouse management tools. Additionally, ERPs have proven invaluable in gathering and transmitting data between enterprise cloud applications to manage critical business processes via KPIs and dashboards. As technology transforms to meet the needs of modern businesses, ERP systems continuously develop to offer valuable business data, especially for financial teams and workflow management.
Why is Financial Planning Important?
Forecasting financial data is an important process because it allows management to review an organization’s current financial state by comparing actual and projected financial figures. Financial planning gathers information on a current fiscal year’s actual data and analyzes various outcomes and forecasts. Using ERP ensures your collected data is accurate, which is important as a financial forecast is only as reliable as the data gathered.
Traditionally, gathering actual data and analyzing variances is a burdensome task that shifts focus away from financial planning’s primary role of forecasting. Using an ERP system allows your company to streamline these processes, ultimately saving your financial team time. ERP software can be designed to forecast and record data, configure the actuals into financial planning models, and provide financial planning training for variance explanations.
Accuracy
One of the most important factors in a successful business is its ability to successfully and accurately manage its financial data. ERP financial management software helps to streamline your processes, increase accuracy, and reduce costs. When financial processes are automated, analytics offers valued insight and management decisions efficiently made.
Additionally, ERP systems are used to prevent errors in accounts and observe company activity.
ERP systems concentrate overall business and financial data, allowing users to gain a comprehensive view of their business and provide insights that would have otherwise been missed.
5 Key Benefits of ERP for Accounting and Financial Management
Enterprise Resource Planning (ERP) software has become an inevitable part of modern businesses. It hosts a world full of business functionalities that are designed to address inventory requirements, quality of finished products, manage production functions and oversee crucial business processes.
The benefits of ERP systems are many but how does it benefit the accounting and financial management department in an organization?
Let’s have a quick glance at the benefits of ERP for accounting and financial management.
1. Integrate, and manage all your financial and accounting needs with ERP
The Finance and Accounting department in every business is indispensable. The way they work can be unique and different, but the objective is almost the same in every case. Every financial manager aims at:
- improving the wealth, profit margin
- minimizing expenses
- promoting savings
- ensuring safety on investments and optimum fund acquisition
- increasing the value of the firm
There are multiple things to manage. From estimation of capital requirements to disposal of surplus to management of cash and financial control, there are many activities to look after. ERP lets you unify the data and bring it all together in one place.
An integrated ERP system improves cost accounting and allows managers to accurately define budget and allocate costs (for raw material, labor, transportation, and other overhead costs).
Whether it is about making payments to vendors, paying wages to employees or financial forecasting, all you need is an ERP system to manage it. Also, when you have a single business management system (i.e., an ERP system) to look after multiple departments, you do not need to work in multiple systems. This indeed minimizes the cost and time spent on many tools.
2. Manage billing, payment, and revenue on time with ERP
ERP acts as a financial management system to ensure customer payment schedules, revenue tracking and credit management across the business. ERP systems integrate a CRM (Customer Relationship Management) system to automate reminders and prevent customer complaints.
With increased tracking capabilities and easy to use automated payment systems, billing, payments and revenue management becomes easy. It can help manage cost analysis, profit tracking, invoice tracking, budgeting, investments and more.
3. Around the clock access to quality data and financial information
You get the data when you need it. When processes are well organized and resources are optimally used, future business ventures are promoted and the bottom-line is enhanced. ERP software allows businesses to maintain financial measures, through having in-depth information, whenever required.
Financial data is confidential and can’t be disclosed openly. ERP gives you the opportunity of safeguarding your information and co-author, edit and manage it as per the access you allow. Multiple reporting options and modules eliminate the need for maintaining spreadsheets and paper files.
Get real-time data synchronization, improved data quality, and an updated view of the organization at the push of a button with ERP.
Generating information, consolidating it, and managing the company-wide business process becomes hassle-free with an ERP system. Shared management tools and integrated financial management modules track accounting data with international standards. This means that you can select a framework in multiple languages, currencies, companies, and charts of accounts.
ERP systems let you gather financial data from different departments to generate reports such as general ledger and other financial statements. Every piece of data is seamlessly integrated within the system and this is what makes ERP an indispensable part of every modern business.
5. GAAP-compliant ERP makes business seamless
Generally, accounting software is often not GAAP compliant, whereas a full-fledged ERP solution typically is. Adopted by the US Securities and Exchange Commission, GAAP is the accounting standard that provides a standardized methodology for recording transactions and events.
An extensive ERP solution, which is driven by a powerful engine, encourages productive financial reporting that goes well with multiple accounting standards, including GAAP.
Which ERP is better for finance?
When it comes to choosing the best ERP for finance, there are several top contenders in the market that offer robust financial management capabilities. The choice of ERP system will depend on the specific needs and requirements of your organization. However, here are three popular ERP systems known for their strong finance modules:
- SAP ERP: SAP is a renowned leader in the ERP market, and its ERP system offers comprehensive financial management functionalities. SAP ERP provides features such as general ledger, accounts payable and receivable, asset management, cash management, financial reporting, and financial analytics. It is known for its scalability, robustness, and ability to handle complex financial processes. SAP ERP also integrates well with other SAP solutions and offers industry-specific solutions for various sectors.
- Oracle ERP Cloud: Oracle ERP Cloud is a cloud-based ERP solution that offers a range of financial management capabilities. It includes modules for general ledger, accounts payable and receivable, fixed assets, cash management, tax management, and financial reporting. Oracle ERP Cloud is known for its strong financial compliance features, scalability, and real-time reporting capabilities. It also provides advanced analytics and integration with other Oracle Cloud solutions.
- Microsoft Dynamics 365 Finance: Microsoft Dynamics 365 Finance is a comprehensive ERP solution specifically designed for financial management. It offers features such as general ledger, accounts payable and receivable, budgeting, cash flow management, financial planning, and financial reporting. Microsoft Dynamics 365 Finance provides integration with other Microsoft products, including Excel and Power BI, allowing for seamless data analysis and reporting. It is known for its user-friendly interface and ease of integration with other systems.
It’s important to note that the best ERP system for finance will depend on your organization’s specific requirements, such as the size of your business, industry, budget, and customization needs. It is recommended to conduct a thorough evaluation of each ERP system, considering factors like functionality, scalability, usability, support, and cost, before making a decision. Additionally, engaging with ERP vendors and seeking recommendations from industry experts or consultants can also provide valuable insights to help you make an informed choice.
The benefits of using an ERP system for accounting and financial management are empirical. A finance manager can create an estimate regarding the capital requirements and manage the overall accounting activities of the organization in a mindful way. Most business owners depend on accounting software, but they don’t understand that ERP systems are an all-in-one solution that encompasses modules for every department including finance, production, quality, sales, procurement, and more. Also, manufacturing ERP systems make things easy and ensure the utmost data security.
