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Growing businesses often start looking for more efficient ways to manage operations, eventually reaching a threshold where managing data on spreadsheets is no longer viable. That’s a pivotal stage for any business, as it’s the point where they start looking for a suitable ERP system.
Enterprise resource planning (ERP) primarily refers to business process management software that brings together and integrates several key functions, including financials, supply chain management, commerce-related operations, process reporting, HR-related activities, and manufacturing.
A range of ERP software applications, including cloud-based options, are available today. Many leading ERP applications are quite modular, allowing businesses to select specific features that they require.
ERP software systems help businesses plan, budget, and forecast the company’s financial performance by tying numerous business processes together, including sales and purchases, marketing, sales, and finance functions.
Historical ERP systems were generally quite siloed, without any ability to work well with other systems. Today’s ERP software offerings are more flexible, allowing you to connect different applications to adapt to a company’s growing needs.
ERP systems often have standardized data structures. Enterprise resource planning software is deployed across the organization, so when information is added by one individual in the AP department, for instance, it’ll be visible by everyone with access to the ERP.
This ensures that all parties remain aware of business processes and transactions. Real-time data makes it easy for businesses to know overall performance. For businesses with distributed locations, ERPs make it easy to track and compare performance.
Businesses use enterprise resource planning for a myriad of different reasons. Instead of relying on legacy systems that are difficult to upgrade or no longer serve the business properly, modern ERPs allow organizations to grow significantly. Here are some of the benefits ERPs offer.
ERPs allow business leaders to allocate resources more efficiently throughout the organization. Using artificial intelligence, business leaders can gain insights into the company’s performance. For instance, if one branch is performing better, decision-makers can allocate more resources to improve results.
Or, if a department is severely under-resourced, the company can plan on moving resources, including capital and human resource, accordingly.
Instead of performing repetitive tasks, ERPs allow businesses to improve business processes by completely eliminating repetitive processes. Once information is added into the ERP system, it is automatically updated and made available to different departments.
This means that there’s only one touchpoint when new information is added in. This not only allows businesses to collect new information more efficiently, but it also makes communication more effective between different departments, which brings us to our next point.
Siloed business departments often lead to unnecessary losses and inefficiencies. However, a vast majority of business projects involve input from multiple business departments. Once information is added into the ERP, members from different departments can access and share information quite conveniently.
The best thing about using ERP software is that data is updated in real time, making it easy for all parties to collaborate more effectively.
For instance, AP and purchasing departments can access information quickly from either department to gain access to new orders or updates.
ERPs make it easy for decision-makers to access data from anywhere in the world. There’s no need for executives to sift through large piles of information or files on their office laptop. Cloud-based ERPs update information quickly and make it available across the board.
So, if you’re on a customer site or in a satellite office, you can quickly access the ERP to find relevant, up-to-date information.
Since the entire database is common, all key decision-makers within the organization will remain on the same page. With no conflicting or duplicate sources of information, business leaders are able to make informed decisions that directly improve the company’s bottom line.
Implementing an ERP can translate into significant cost savings for growing businesses. It helps companies avoid costly mistakes to reduce administrative and operational costs. This frees up resources which can then be utilized in other, more pressing areas.
By cutting down on logjams or disruptions, businesses can generate a much greater ROI. The information from ERPs can be used to make smarter investments and cut down costs as a business sees fit.
ERPs are highly flexible models and provide information from various business departments, presenting it in various ways, including spreadsheets and graphical charts. Business leaders can gain much greater insight into business processes, which unlocks a whole new level of transparency.
These granular insights provide greater detail about how the company functions, and steps that the business can take to improve operations.
More importantly, customized reporting solutions are also available. For instance, CFOs can create customizable finance dashboards that provide an insight into the company’s business performance.
More importantly, ERP systems can help companies avoid hefty fines as a result of non-compliance with regulatory guidelines. Most modern ERPs can be updated with the latest industry guidelines, and they keep track of subsequent changes. This allows businesses to amend processes as regulatory requirements evolve.
Some of the most popular ERP providers include:
ERP systems are great, though they lack certain functions, such as comprehensive data capture of incoming invoices. More importantly, ERP systems can’t automatically capture information from incoming invoices and help you conduct a more comprehensive analysis.
Instead, a better option is to integrate AP automation software with your ERP. SoftCo Accounts Payable Automation can integrate seamlessly with your existing ERP and help you gain a better understanding of your AP department’s performance. It can manage all PO and non-PO invoices, automatically capturing and posting vendor data.
With over 30 years of experience in successfully integrating databases and financial systems, SoftCO is a fantastic choice for modern businesses looking to streamline their AP departments.