ERPs Instant And Continuing Financial Impact

PostedOn: 2016-12-31 12:07:19

Enterprise resource planning (ERP) software allows a company to simplify numerous processes into one program, which make sure that all departments and workers are using the same, most up-to-date information. ERP software offer many advantages, but some of the most important are those related to plummeting expenses. An effective ERP software system can help a business save money both immediately, following program completion, and in the long-term financial review.

ERP’s Financial Impact

ERP software helps companies identify and correct areas of weakness in their business processes, plummeting inconsistencies and errors. In many cases, this alone will help organizations reduce costs. There are abundant areas where an ERP system can aid with immediate and long-term savings, including:  

  • Immediate savings:

    • Decrease carrying costs.
    • Track and gather exceptional invoices. 
    • Reduce preparation costs. 
    • Reduce equipment damage.
  • Long-term savings

    • Balance bank statements. 
    • Save at tax time. 

Immediate: Reduce Transportation Costs

In businesses where itinerant or deliveries play a significant role, keeping transportation expenses to the smallest amount can be a key factor in cutting costs. Using the features and tools in ERP software, businesses can create a more efficient delivery schedule, decreasing the number of repeated trips or manifold deliveries to the same job site, branch, location, or area. Lowering the number of pouring hours saves costs by decreasing the number of work hours needed and the fuel needed. 

Immediate: Track and Collect Outstanding Invoices

One of the most common financial issues with many businesses is unpaid credit accounts and invoices. Using an ERP system, businesses can track unpaid accounts and create follow-up contacts that are more efficient. Without errors in invoicing, billing dates, emails, or collection notices, businesses will see an immediate impact on their bottom line.

Immediate: Reduce Training Costs

Businesses can spend up to $1,000 per year per employee on training. By using the training tools included in the average ERP installation, such as instruction manuals, FAQs, training guides, tutorials, and videos, the costs a business incurs for training can fall dramatically. In addition, employees can complete any guidance they need during their regular workday instead of requiring time off to attend classes, workshops, or conferences.

Immediate: Minimize Equipment Damage

Accidents happen. Using an ERP program, it’s possible for a business to track when, where, and who is responsible for the damage, allowing the business to file proper paperwork and claims and make reimbursements quickly. In addition, ERP’s mobile capability allows employees to maintain a rationalized record of the condition of packages, products, or equipment before each pickup and delivery.

Long-Term Financial Impact

ERP software offers businesses a more efficient organization system that leads to cutting costs and growing savings. But what specific benefits does ERP offer when looking at the long-term financial impacts?

Balance Bank Statements

It’s always important to keep things in balance. This is especially true for business bank accounts. Knowing credits and debits as well as when they hit the account, which department they’re from, and whether any is tax deductible helps ensure a more accurate balance. Using ERP software, businesses can reduce the amount of time they invest in searching for charges, deposits, and receipts and use a set of checks and balances to ensure that all statements are correct.

Save at Tax Time

Another long-term financial impact of ERP centers on taxes. Filing taxes can be a daunting and tedious task. Collecting all the necessary financial information from each department can take time, and often something important is missing or incorrect and must be investigated, which can lead to errors, filing extensions, late fees, or even penalties or liabilities. If the error is serious enough, the tax authority may even feel the need for an audit, costing the business more time and money. 

Using an ERP program, all necessary financial information from all departments, quarters, accounts, and otherwise is saved to a centralized file location. Sp. the information can be updated, downloaded, printed, and accessed easily and quickly whenever necessary.

An efficient ERP software program helps businesses manage processes, inventory, and employees. It helps them cut cost immediately following ERP software implementation and in the long term. Taking full benefit of all the features and tools the ERP program offers ensures that the business will be more well-organized and productive, which lead to investments and profits.