Enterprise Resource Planning (ERP) has been recognized as a necessity for practically all companies, regardless of the size, and the sector. It is no longer seen as a matter of choice, but as an imperative. After all, which organisation would not benefit from a real-time integrated view of all its core business processes? It is universally acknowledged that an effective ERP system can streamline and improve every aspect of business
This is even more so when it comes to accounting and other financial aspects of an enterprise. In fact, the financial module is the flagship module of many ERP systems. Not only does it provide visibility into, and control over, a company’s most sensitive data, it also enables compliance with regulatory bodies, reducing risk in the process.
An ERP system is an indispensable tool for organisations to manage various aspects of their accounting process, be it taxation management, regulatory reconciliation, capital management, purchase management, accounts receivable, accounts payable, payroll management, and much more. It helps businesses to collate financial data from various functional departments, and generate monetary reports such as quarterly, half-yearly and annual financial statements, balance sheets, trial balance, and so forth.
By providing a real-time look into the company financials, an ERP system allows companies to manage and analyze costs, and link them to various aspects of their business, thus improving performance and reducing back-office expenses. Thanks to standardized processes and a single, integrated solution, companies get the requisite flexibility to scale production, accounts payable, accounts receivable, and inventory to exact specifications. As a result, costs can be more carefully balanced over time, and configurations can be tweaked.
By providing a clear view into the cost of manufacturing and any related expense, an ERP system allows companies to review the costs of projects, and adjust the same to balance allocations. Cost variances can be identified and addressed quickly to balance the allotted budget. Besides, companies can have a better assessment of why the variance is occurring, thus giving them time to initiate remedial action, long before the impact is felt on profits. And if costs are found to be lower than expected, then new standards favoring the company can be set.
An ERP system also enables a company to review costs over a period of time, or according to a specific classification. Companies can, thus, reference multiple cost balances and create cost tables in order to better analyze cost allocations, and make better-informed decisions. Companies can also provide best estimates to stakeholders, with more precise profit predictions. Besides, an ERP system allows a business to focus more on data examination, rather than just data entry.
In the end, when it comes to accounting and managing the financial health of your organisation, an ERP system not only streamlines your processes, providing greater visibility and control, it eliminates risks associated with manual processing, thus letting you breathe easier.