Complex financial data such as budget estimates and cash flow management must be current to enable organizations to make informed business owners decisions. Monitoring and analyzing the flow of funds going in and out is crucial. This information can drive profits and help with business growth.
ERP solutions connect essential financial and operational business functions seamlessly. They provide a single source for data and real-time insight. ERPs can integrate functions within a company, such as inventory, order, supply chain management, procurement and distribution, fulfillment, and sales. They also can provide a single source of data and a wealth of operational insight.
Cloud-based ERP Platforms provide all the benefits and special features of traditional on-premise ERPs. Still, they are often deployed in the cloud. They can also be sold as software-as-a-service (SaaS) and often on a subscription basis. Cloud ERP solutions allow organizations to have access to the internet. To access the software, employees only need an internet connection and a browser.
Because ERP technology can be used to streamline business processes and provide real-time insights across all departments and employees, they are ideal for growing and industry-specific companies. These applications also have industry-specific features. An automated inventory management module is available to include wholesalers, construction subcontractors, food service retailers, and ecommerce businesses.
If you're considering moving to ERP implementation, read all the information here about the benefits of cloud ERP platforms and use case examples.
Cloud ERP Systems Offer Many Benefits
If you choose the right ERP platform for your business intelligence, you will reap the benefits quickly. The top value points include increased security, cost savings, and efficiency.
There are many benefits to cloud-based ERP solutions.
Cost-Savings:
- Reduce costs significantly by eliminating the need for hardware and data servers instead of traditional on-premise ERP systems.
- Reduce upfront costs for software licenses by replacing them with a lower monthly fee.
- Cloud-based updates can reduce IT costs by avoiding downloading software for ERP systems on-premises.
- You don't have to pay for additional features or functions you don't use. Only pay for what you need.
- You can budget for the year by knowing your fixed monthly cost upfront.
Efficiency Gains:
- You can install faster because hardware and server-based programs are not required.
- Using sophisticated workflow features to link departments and automate workflows can lead to company-wide efficiency improvements.
- You can use system scalability's ease to adapt system functionality as your company grows or changes.
- You can increase productivity and support remote workers with on-demand, real-time access to a cloud-based ERP solution.
- You can tailor accounting customization using an ERP cloud platform. Using purpose-built business apps allows you to optimize for specific industry needs.
Security:
- Rest assured that your data is safe with regular backups and state-of-the-art security, including file encryption and multifactor authentication.
- You can rest assured knowing that your cloud vendor has a disaster recovery plan.
Cloud ERP Features: Examples
ERP users have many powerful features available that allow for company-wide process automation and synchronization of business functions. A company can choose from various ERP modules tailored to its industry or business needs. These are the most common cloud ERP modules:
- Accounting and Finance: Provide full transparency over financial data to make informed business decisions. You can leverage essential accounting functions such as custom reporting, budgeting and cash flow analysis, quarterly and annual financial statements, and custom reporting.
- Human Capital Management: entails overseeing human capital functions such as health insurance, retirement plans, and employee wellness programs.
- Customer Relationship Management (CRM): This is where sales, marketing, and general communications are managed to provide the best customer experience and customer satisfaction. You can see what's happening right now with a clear view of client records. Maintain strong client relationships and consistently attract new leads to the business by using data-driven messaging.
- Inventory Management: To avoid potential disruptions or other issues, provide full transparency into your inventory and supply chain channels.
- Order Management: Produce sales quotations, sales orders, and purchase orders in draft form without adding inventory or warehouse management software. You can support a simplified bidding process by allowing batch communication to multiple vendors.
- Procurement: Maintain complete control of the procurement process and provide financial leaders with transparency into bids and the acquisition of goods.
- Supply Chain Management: Get a clear picture of supply chains to ensure consistency in production and plan for any disruptions early.
- Project Management: With cloud-based management software, you can ensure that your organization can efficiently plan, organize and manage relevant resources and create resource estimates.
- Material Requirements Planning (MRP): Strengthen supply chain management with advanced planning functions. These planning functions help companies understand inventory requirements and balance demand and supply.
- Mobile Access: Many cloud apps are SaaS ERP software systems that securely and efficiently offer remote access to accounting data securely and efficiently for maximum efficiency.
Common Use Cases And Industry Application Categories
Each business is unique and will require different functionality. It's important to avoid adopting a generic approach to cloud ERP. It is essential first to outline the use case of your core business activities to determine the criteria you need for cloud ERP.
It is essential to be familiar with the basic ERP categories before you dive into everyday use cases.
- Multi-Tenant: This allows you to have one ERP software version for multiple companies. Each company may use the same software, but each company's data is not accessible to the other. Accurate cloud ERP systems are typically multi-tenant.
- Single-Tenant: This allows for one ERP software version to be used by a single company. The company's data is stored on private servers that run a specific software instance.
- Public Cloud: The software is shared with other organizations by the service provider, making it a public cloud. Each organization's data is protected and cannot be accessed by others in the cloud computing environment. Public cloud services include Amazon Web Services (also known as Google Cloud), Microsoft Azure (also known as Microsoft Azure), and Oracle Cloud.
- Private Cloud: This additional service is private and is not shared with anyone else.
- Hybrid ERP: a combination of on-premises software and a private or publicly accessible cloud for computing, storage, data, and services.
Understanding the different ERP categories can help you choose the right solution for your company once you have created a use case.
A use case is a way to understand your business better and create a blueprint for your system. These are some simple use cases for ERP modules, including inventory and finance management.
Financial Management Use Case
Financial Management is crucial to any business, regardless of size or industry. An accounting-first approach to ERP adoption is expected as a business grows. This is because every department requires accurate financial data and real-time access. The following is an example of a wholesaler.
Despite the recent expansion and the addition of a second warehouse, the company's finances are still managed using online banking tools and spreadsheets. This involves manually tracking customer orders and purchase orders (accounts due).
This takes too much time and gives little insight into financial data that can be used to forecast cash flow accurately. This makes the company vulnerable to cash shortages or even bankruptcy.
The wholesaler can automate AP and AR transactions by implementing an ERP financial management module. This allows for easier general ledger management and better cash flow control. Finance and accounting staff can create customized reports by using data from balance sheets, cash flows statements, and payment receipts.
This allows them to pinpoint the accuracy of their data. The financial reports can be shared with all departments in an easy-to-understand manner. This allows for complete transparency in financial data and provides access for all employees.
Use Case For Inventory Management
Inventory management is an ERP module required in many industries, such as manufacturing, retail, wholesalers, construction, subcontractors, and others. The following is an example of a retail business that uses inventory management.
The retailer's operations team relies heavily on physical counts to maintain inventory levels. The team currently uses a spreadsheet to enter data manually. Warehouse workers need more confidence in their data due to the higher chance of errors associated with manual input. Orders are placed only when stock is almost exhausted. This means that items often need to be put in stock. Because warehouse staff often need help finding items, fulfillment times can be slow and inefficient.
Cloud-based ERP solutions replace manual spreadsheets with an automated inventory module that delivers real-time data. This includes information on inventory levels and stock updates on the way to the warehouse. The operations manager can use daily sales data to compare inventory levels to decide if the company should order replenishment stock. The warehouse team can fill more orders daily because the system pinpoints the exact location of merchandise.
Consider These Key Points When Considering Cloud-Based ERP Platforms
Cloud ERP systems can support multiple business functions in a single database. They integrate operations and provide transparency across the company. Although ERPs can be a good option for growing established businesses, they can also prove costly and difficult to implement. Consider several factors when evaluating cloud ERP vendors.
It is important to remember that vendor evaluations should be initiated before you can define your system requirements and map your business processes. The more detailed you are, the better. For informed planning to be effective, you need to get feedback from production workers, product experts, purchasing and supply chain managers, executives, sales staff, and other key personnel. You can better understand your company's needs and get input from them. Doing your research upfront will help you stick to a budget and a timeline.
These key considerations will help you get started as you work through your criteria list.
Industry-Specific
Too often, business leaders choose an ERP platform based on the price or buzz surrounding a new product. Make sure you are evaluating ERP platforms that fit your industry. An ERP platform that meets your specific operational needs will provide tools and key features. Work in professional services, for example. Your operational needs and processes will differ from those of other verticals like food and beverage, non-profit, subcontractor, and subcontractor.
Available
System uptime is defined as availability. An ERP solution links all business functions. If it fails, it can cause your entire operation to stop. Any disruption to service directly impacts your bottom line. Ask for metrics on uptime when evaluating cloud ERP software. This data should be readily available to providers. They should be prepared to sign a service agreement for at least 99.9% availability, equating to less than eight minutes of downtime annually.
Cloud-based ERP systems offer users real-time access from any location, anytime, and on any device. Employees can make faster decisions and feel more confident with on-demand information, except that the system is down.
Scalability
It is essential to consider how ERP systems can fit your business's needs today and how they can adapt as your business grows. It is crucial to consider how a software solution can scale your fresh business resources as you grow. Top-of-the-line ERP solutions allow companies to start with the core functionality and then add additional functions as required.
The ability to seamlessly integrate with other cloud-based products without downtime or additional hardware requirements is another significant advantage in terms of scalability. With this level of agility, businesses can adjust quickly to meet industry changes, emerging trends, and unexpected disruptions.
It is essential to understand the differences between single-tenant and multi-tenant cloud models if you want to use the cloud's inherent flexibility.
Security
Although most cloud-based ERP platforms score high in security standards, assessing solutions based on this checklist item is essential. High-security systems use advanced encryption to protect and conceal data. It will protect your identity and restrict access to unrecognized programs that decipher encrypted files. A common security feature is multifactor authentication.
Ensure that you double down on security by choosing an ERP solution offering advanced user interface permissions. You can set permissions to ensure that only authorized people to see sensitive information, such as financial data, have access.
User Support
ERP products can only be as good as the support they receive. Users will encounter issues with their ERP solution. Expert system assistance is required. Cloud ERP software vendors provide dedicated support services that are available regularly. A dedicated support team should be available to assist with the initial setup. You must have access to quality documentation from the vendor.
Read More: 8 Benefits Of Cloud ERP Software For the Finance Department
What Is The Relationship Between ERP And Accounting?
Enterprise Resource Planning (ERP) plays an integral part in modern businesses. It enhances productivity, automates business processes, and streamlines them - even accounting.
ERP solutions can help companies streamline their accounting processes through data integration. This gives them a clear 360-degree view, which allows managers and owners to make informed decisions.
ERP software is far more effective than standalone accounting solutions for managing the finances and accounting of an organization. It allows you to manage and track pan-organizational operations via a single platform.
Financial data insights can improve cost efficiency and increase organizational financial productivity.
ERP in Accounting: Benefits
We now have a better understanding of the relationship between ERP and accounting.
Let's take a look at the many benefits of ERP.
1. Manage Your Financial and Accounting Needs
Every business must be able to manage its cash flows efficiently and effectively. An ERP module makes this possible.
It provides access to vital business information and allows you to create a budget and allocate financial resources for various purposes such as raw material procurement, marketing campaigns, and employee salaries.
A unified system for managing multiple departments or processes reduces time and cost reduction. You can:
- ERP is used to estimate capital requirements and manage cash.
- Budgets should be accurately drawn up
- Calculate the costs of different activities
- Pay vendors and employees.
2. Eliminate Duplicate Data Entry
Today, most organizations use an ERP solution to manage their business operations. When you integrate it with the accounting module, you can save yourself the hassle of comparing and verifying information from different systems.
It can also eliminate duplicate entries, significantly improving data consistency.
3. Transparency Financial Information
ERP accounting allows you to access financial information at any time you need it.
The ERP system is designed to provide accurate, reliable information in a timely fashion so that resources can be used efficiently and business processes can be adequately managed and organized. It gives you a complete view of financial data.
4. A Higher Level Of Control
One of the most significant advantages of ERP in accounting is that it empowers and gives you greater control over your business requirements. Real-time visibility of how decisions and events affect your bottom line. You can improve your decision-making skills, reduce costs, increase profitability, and drive growth.
5. Automate Your Workflow
Automating your business processes makes it easy to improve your core business operations. An ERP for accounting management includes time-saving features such as inbuilt workflows. They automate your accounting process and simplify data entry.
It improves cash management, solves cash flow problems, and simplifies complicated accounts payable and receivables. With the ERP software's Accounting and Finance modules, you can easily track, analyze, and gather financial information from various departments.
It can also produce financial statements such as balance sheets, profit or loss statements, etc. This automation makes it easy to collect data from all levels of the organization and use that information to manage your business better.
6. Reduction of Human Errors
Data entry by hand is always susceptible to error; accounting and financial data are no exception. Sometimes, fatigue and monotony can cause manual capture to become stale. This can lead to lost focus and incorrect keys. Incorrect or incomplete accounting data can adversely impact financial reports and lead to tax complications.
The ERP solution detects and corrects errors in data entry. This reduces the chance of incorrect invoices being generated, obscene amounts being paid, or other accounting problems arising from data entry mistakes.
7. Great Tracking Capabilities
An essential benefit to ERP in accounting is its ability to be used as a complete financial management system. This includes enhancing activities such as credit management, revenue tracking, customer payment schedules, etc.
Activities like revenue, payment method, and billing are easy to manage if an ERP solution is installed in your company. You can also use the software for profit tracking, budget analysis, additional cost analysis, invoices, and other business information.
8. Get Detailed Insights From Financial Data in Real-Time
ERP for Accounting and financial Management offers comprehensive, detailed visibility into the financial situation of the entire company across all departments.
This system allows you to view your organization's fiscal health efficiently and clearly. It also helps you control expenses, measure revenue, and manage other accounting activities. This ensures you are always informed about every financial transaction as it occurs.
9. Strong Reporting Capabilities
Accounting departments spend a lot of time preparing financial reports for various stakeholders, such as shareholders, tax authorities, banks, etc. An ERP system can eliminate all manual labor and comes with robust reporting capabilities.
The inbuilt filters can also be modified to meet the needs of different agencies. This allows for accurate and detailed financial reports.
10. Financial Data Security
Financial information is highly confidential and requires high-security protocols to protect it. An ERP system that is reliable provides multiple levels of security. It has strict protocols and centralized databases that store data.
Users will only have role-based access. They will need to use multiple authentications to gain entry. This ERP software can protect financial information and prevent security breaches.
Want More Information About Our Services? Talk to Our Consultants!
Final Words
ERP is a powerful tool for financial Management. The statement assumes that the ERP solution will be well-designed, efficient, and work as intended. Cloud ERP is becoming more popular with companies of all sizes. Cloud-based ERP offers many advantages over traditional software.
These include more flexibility, lower costs, and easier scaling. Imagine that you are considering migrating to cloud-based ERP. This guide will help you understand the technology and its benefits to your company.
