Enterprise resource planning (ERP) software is providing new opportunities for businesses of all kinds to increase operational efficiency, reduce costs and achieve their growth targets.
Recent research by Insights for Professionals, encompassing 207 managers and senior leaders in the US and the UK, highlighted the extent to which companies are benefiting from this technology.
Key findings showed:
- More than half of organizations currently using ERP have achieved process optimization as a result
- Two-thirds of companies reported increased visibility into data
- Businesses with fewer than 1,000 employees are almost twice as likely to benefit from process optimization as those with 25,000 staff or more
The research also revealed that the automation of core business processes is one of the most valuable applications of ERP. Just over half (51%) of respondents said they used their software for this purpose, with only accounting (66%) and data analysis and real-time reporting (60%) appearing higher on the list of valuable ERP capabilities.
For your business to derive maximum value from its ERP platform, you should be aware of the potential it provides to automate some of your most critical functions.
1. Invoicing
Effective invoicing procedures are essential to the success of any business. After all, you can't expect to maintain a healthy cash flow and strong finances if you aren't being paid promptly and fairly for the product or service you provide.
ERP automation enables you to take a lot of the manual work out of basic tasks such as making sure invoices are sent out at the right time in each customer payment cycle, populating them with accurate data and issuing reminders of imminent deadlines.
The power of ERP to optimize your invoicing will prove particularly valuable as your business grows and the number of customer relationships and payment schedules you have to manage increases. During these periods of expansion, being able to rely on technology to look after routine but essential jobs is a big advantage.
2. Purchasing
As well as facilitating proper invoicing for the products or services you've sold, automated ERP workflows can support efficient procurement. This helps you ensure the business can access the crucial materials and resources it needs to function properly.
Where inventory management is concerned, your software can take on responsibilities such as monitoring your stock levels in real time, identifying shortages and generating purchase orders to plug these gaps. Each purchase order can be automatically sent to the appropriate stakeholder for approval before being passed on to the vendor.
Achieving maximum efficiency in your procurement and purchasing activities feeds directly into customer satisfaction, since you'll always be well-prepared to meet demand and satisfy requests, even at the last minute.
Furthermore, automation helps you keep up with your payments and stick to deadlines, meaning you avoid bottlenecks and maintain good relations with your suppliers.
3. Payroll management
As your business grows and your workforce becomes larger and more diverse - potentially with many employees on different contracts, schedules and benefits packages - effective payroll management becomes more of a challenge.
Getting this right should be a top priority for both the finance and the HR department, since the company can't hope to succeed if it's falling short on basic commitments such as paying its employees accurately and on time.
ERP software enables you to automate some of the most important elements of payroll administration, such as calculating gross pay for individual members of the workforce, making the correct deductions at source and reflecting these figures in your company accounts.
4. Financial forecasting and budgeting
Another powerful capability of advanced ERP platforms is the automated collection and presentation of data for use in your financial forecasting and planning.
Rather than having to go through the manual process of gathering relevant information and incorporating it into your budgets and predictions, you can assign this task to your ERP and save your human employees a lot of time and effort.
Software with specialist predictive tools can also help you make more accurate forecasts, based on analysis of historical data, trends and other relevant indicators.
5. Data analysis
The ability to analyze, visualize and accurately report data is a key factor in the performance of any finance department. From your accounts payable to internal product development and payroll, there are many processes that you can better understand and optimize through the analysis of data.
New technologies can help you do this more quickly and efficiently than ever before. If you want to know the percentage of invoices that were paid late in a given quarter, for example, ERP automation can help you gather that information with greater speed and accuracy than a human worker would be capable of.
As you set your sights on growth and look for opportunities to take your business to the next level of success, this sort of data-driven understanding and insight could be a key element in your overall performance and results.
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Finance Insights for Professionals
Insights for Professionals provide free access to the latest thought leadership from global brands. We deliver subscriber value by creating and gathering specialist content for senior professionals.
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