Enterprise resource planning (ERP) systems help companies organize, manage, and optimize numerous activities, including project management, supply chain operations, and customer service. Proper accounting plays an important role in all of these areas, among others. Without a clear look at what the company is earning and spending, it’s nearly impossible to make appropriate business decisions. An ERP accounting module can provide several essential features that will improve business management.
Your ERP’s accounting module can streamline client management by maintaining organized profiles for each buyer. This may include data like purchase history, balance sheets, and more. The ERP may even include a customer portal where clients can view inventory in real time, evaluate pricing, and place orders. Empowering customers to handle their own shopping experience can ease the burden on sales teams and increase efficiency. Your ERP can even deliver automatic reports like invoices and quotes to clients.
From the financial side, this feature streamlines accounting activities like profit tracking, requisitions, and purchase order management. When invoices are delivered automatically, accounting becomes less laborious, as many points of collection become automated.
Your accounting team requires a wealth of data to perform their routine activities. When this information is stored across multiple programs, it can take precious hours for employees to simply gather the data that they need. From that point, they will still need to analyze the information and generate actionable reports. An ERP system eliminates the need for multiple programs and instead pulls this information into one cohesive spot.
An ERP accounting module builds on this functionality by making it easier and more efficient for employees to access and evaluate the information stored within the system. The accounting module can also generate reports automatically or on demand. These reports may help with key activities, like managing taxes, following audit trails, and complying with regulatory requirements.
Management of Accounts Payable and Receivable
The financial module of your ERP can handle accounts payable (AP) to help your company quickly and accurately determine how much they owe to creditors, vendors, and others. The AP feature in your accounting module helps eliminate errors by precisely calculating information sourced from a large number of financial transactions. This makes it much easier to manage cash flow and access the appropriate information for financial decision-making.
Meanwhile, the accounts receivable (AR) feature of the ERP module manages invoices and payments. It can send initial invoices, recurring invoices, and payment reminders. This helps streamline collections so the company can take a fairly hands-off approach, particularly with clients that pay predictably and on time. The AR function helps companies easily understand how much they’re owed, what’s coming in, and when they can expect it.
Forecasting is an important part of financial management. This is the process of evaluating current and historic data to make predictions about the future. Proper forecasting will help your company adequately prepare for coming costs and decide how to best utilize incoming funds. Your accounting team must analyze revenue, expenses, and cash flow to generate appropriate forecasts.
Having an accurate forecast helps managers make important internal decisions, like how much inventory to purchase and which products to promote. These forecasts help externally as well. If you’re looking for investors or business partners, you’ll need this information to prove the financial viability of your business and entice others to engage with your company. An ERP accounting module will gather, organize, and deliver appropriate forecasting data to your accounting team to streamline this process.
Your business uses seven different general ledger accounts to manage and evaluate financial activities. These include assets, revenue, expenses, liabilities, equity, gains, and losses. Every business transaction needs to post to two or more of these ledger accounts. Maintaining and balancing this information is a monumental task when done manually. However, the accounting module in your ERP can manage the task flawlessly, provided that the right information goes into the system. The module can compare information to the business’s bank account and other financial reports to ensure accuracy and identify any potential errors.
Proper account reconciliation will help detect and prevent fraud while making it easier to balance the business’s finances and make critical decisions. All of the myriad financial activities built off of general ledgers are enhanced with this feature.