Every ERP system differs from others. As far as its benefits are looked upon, it is mainly linked to manufacturing, production and supply chain benefits. It is less likely to be associated with giving an advantage to company’s financial management. Majority of business owners have reviewed ERP solutions as costly. In fact, 50 percent of the people have outlined cost overruns. And out of these, half of them have not even recovered the costs associated with ERP implementation. An ERP finance management software is the most important tool required to drive business growth and reduce costs. ERP systems with finance features or finance module are a must which helps to successfully maintain financial information such as accounts, assets, cash, and budgets.
An ERP finance management software can provide an organization with a comprehensive view of a company’s finances, revenues, expenses, profits, capital, and cash flow. It gives an accurate analysis of how a company is performing from the standpoint of expenses, profit and income. Finance managers are able to view extensive details associated with accounts and how these accounts are integrated with business analytics.
The overall performance of a company can be evaluated financially using an ERP incorporated with finance. In the absence of financial analysis, a company fails to determine how much money it is actually making. It benefits a company to make efficient decisions and strategies for their businesses.
Above all, this complete view of a company’s financials becomes helpful to gain control over financial information, improving finances and reducing debts. This can be done by an ERP system’s capability to help businesses to manage inventory by setting stock levels. Moreover, it gives you one way to interpret in which stock you should invest.
Let’s look into the specific ways how it revives company’s financials:
There is a dire need to manage the assets of an organization effectively because if managed poorly, it incurs a loss for a company. Depreciating stocks, lost or stolen stocks would add to extra costs that need replacement to cope up with a loss. This also increases insurance costs. With an ERP financial management software, a business can easily track and effectively manage these assets. Plus, it allows you access to comprehensive reporting of asset valuation and location. Indeed, with better monitoring of assets, an ERP software prevents theft.
Cash flow is the lifeblood of any organization which drives everything forward. Based on a survey, businesses reaped benefits from ERP finance management software, and 52 percent of business decision makers reported that they witnessed better cash flow and liquidity. This is achievable by ERP systems because businesses can better manage inventory stocks. Features like automatic re-ordering of stock and up-to-date data would help organizations make better and efficient decisions associated with manufacturing processes. So, they can maximize profits and minimize costs.
Lastly, ERP finance management software also increases revenues by keeping marketing and sales operation more focused and targeted.
It has been observed that by using ERP software and making data-driven decisions for management, companies make 6 percent higher profits and 4 percent higher productivity than those who do not use this technology. ERP can give a competitive edge to companies if they have access to this valuable data. ERP finance management software offers great and instant visibility into data like budgeting, financial reporting, sales, accounting, order management, and billing all of which is helpful in making better decisions by the management.