All businesses thrive with “Vitamin M” – Money. Reliable financial and accounting management is key to the success and survival of a business. A range of different activities such as forecasting budget, managing cash flow, and updating books, financial information must be kept accurately updated to ensure that companies are making efficient decisions when facing critical business choices. By effectively tracking and analyzing financial information any business can successfully drive business growth and revenue.
An ERP system plays a vital role in enhancing operational efficiency and mitigating human error that could have a detrimental impact on the business. Its [ERP] fundamental role is to optimize and improve all aspects of business practices including financial management.
Let us explore the benefits of ERP in finance management.
How Does ERP Benefit In Financial Management ERP?
ERP (Enterprise Resource Planning) software is an efficient and robust software compared to any legacy or standalone operating software. It helps you manage business operations across your business through a centralized dashboard across various verticals. Essentially, what an ERP does is that it captures data from multiple touchpoints/divisions of your business and analyses it to provide a comprehensive financial overlook. It automated major parts of your accounting and billing cycle, it also simplifies the processes involved in accounts received, accounts payable, and improve cash flow issues. By deploying an ERP solution you can generate, track and analyze financial information and improve your business decision-making, it also accelerates financial management.
All Accounts & Financial Needs Managed
Almost all organizations need to strategize to plan capital requirements preemptively so that they can manage cash effectively and have the highest return on investment. With an integrated ERP accounting system you access important business information such as budget allocations, maintain payroll, purchase orders and raw materials, transportation information and logistics costs, and other operational expenses. It also has a key component of clarity as you have a sole system for managing multiple departments which minimizes resource expense and the time fragmentation between various other tools.
Transparency, Automation & Financial Management
As established with an ERP system you get access to financial information as and when you need it. The system is capable of providing accurate, reliable, and vital information to keep operational processes smoothly running while providing insights on how to be cost-efficient. An ERP also enhances areas through its predictive algorithms which can provide long-term venture profitability.
An ERP allows for the rapid automation of manual data entry so that you can concentrate on improving the core business processes. It achieves this by having in-built workflows and other time-efficient modules that swiftly streamline data entry across multiple channels in real-time to ensure that accounting is always managed accurately. It also simplifies the accounting process of accounts payable and receivable thereby improving overall cash management. Practical insights can be drawn by relying on the financial management features of erp.
There’s always a risk of human error when capturing accounting information manually, which can be due to multiple factors. Any incorrect accounting information can drastically affect the revenue analysis further causing accounting issues leading to inefficient and inevitable tax complications. ERP helps detect these data entry errors while running on manual entries and reduces the risk of generating incorrect invoices or paying more or less by mistake.
Real-Time Insights & Financial Management
With an ERP the fiscal health of your business is visible to you at all times. With such transparency, you can diagnose the inefficiencies in your business’ financial processes. An ERP will let you monitor costs, measure, and compare revenue growth/decline and all related accounting processes. As you have easy access to financial data, you can remain up-to-date with every monetary transaction and activity the second is made. That’s the power of real-time financial management ERP.
Earlier accounting executives had to spend a lot of time preparing financial reports and statements in different categories for shareholders, regulatory authorities, banks, management with different sets of GAAP compliances worldwide. However, with an ERP you can control the information and its presentation easily. It comes with a variety of built-in custom filters and templates that can be used to generate reports that can be delivered across multiple departments digitally.
ERP = Financial Data Security
Any financial information is highly classified within a business. To ensure safety and eliminate fraudulent dealings, ERP software provides a multiple-layer encryption and security layer on any stored information which has role-based access to authorized users only. This prevents massive security breaches and protects financial information all around.
An ERP system uses “multi-factor authentication” to factor access requests between a legitimate user and a fake one. It protects business processes and databases from external attackers. Another way it (ERP) secures your financial data is by deploying behavioral analytics and monitoring. By doing this it can capture human users and applications with malicious intent whenever any user acts in an unexpected manner or bypasses any workflow required.
The ERP also improves the overall cyber-security infrastructure, protecting not just your financial data but the entire business information architecture. Modern ERP solutions such as Magento or Epicor P21 are able to create tiered user roles that limit access to vetted operators only. It also improves network strength as only verified users can log onto it. By constantly monitoring and auditing for bugs, viruses, or hackers the ERP is working round the clock to ensure that all the data remains protected at all times.
You can learn more about ERPs and how to integrate them into your business at DCKAP.