Understanding the Importance of an ERP Software
Enterprise Resource Planning ERP software is a must-have in any business. That’s because ERP software automates many of the tasks that would normally require manual intervention, and reduces operational costs for businesses.
It starts with a client/server system that allows for easy data exchange between all divisional departments without crossing organizational boundaries or departmental information silos.
And there are also modules to automate all the essential back-office functions of any organization like accounting, customer relationship management, supply chain management, human resources, and more. Let’s explore!
Manage Finances with an ERP Software
Let’s start with finance. Accounting is a huge part of any business. A comprehensive ERP software package helps you manage your accounts more efficiently by reducing the time spent on accounting-related tasks and increasing accuracy.
Depending on where you live, you might want to find a local software provider. If you’re in Toronto, Canada, you’d want to start by engaging in work with a Dynamics 365 Partner in Toronto who can centralize your business operations.
Here are some of the most common reasons why companies choose to automate their accounting function using an ERP system:
1. Streamlines processes to increase efficiency and accuracy;
2. Eliminates the need for data entry by enabling direct integration with point of sale systems, eliminating double entry;
3. Allows multiple company locations to manage all their operations more efficiently by providing access to real-time information wherever they are;
4. Helps you make better and faster business decisions because you have all the relevant information at your fingertips; and
5. Saves time and money by eliminating paper processes, reducing errors, and increasing productivity.
As a result, businesses using an ERP system not only save time each day but also improve their bottom line by increasing revenue and minimizing operational expenses such as employee salaries, energy, supplies, etc.
Increase Profits with an ERP Software
An ERP system can also help increase your profits by enabling you to make better business decisions because it provides you with relevant information about the company at your fingertips.
This gives managers greater visibility of all company-wide data that are available in real-time, allowing them to manage resources more efficiently and reduce expenses.
For instance, having access to real-time production line reports helps managers determine how best they should allocate their resources based on actual demand for each order.
They can now compare actual costs against budgets and forecast future revenues more accurately which ultimately allows them to do a better job of controlling costs while supporting growth objectives.
At the same time, they’ll have more accurate information on cash balances, the time it takes the cash to collect, and whether a payment has been received.
This helps them determine how much money they have available for new orders and where they need to focus their efforts to ensure they can meet all of their short-term objectives.
ERP Systems Foster Collaboration
An ERP system fosters collaboration between employees of different departments because of its open architecture design that allows easy integration with other business applications such as CRM software from Microsoft.
Not only does this help employees work more efficiently together on a common goal but also encourages them to share knowledge about the company more freely instead of siloing off information into separate departmental databases that are accessible only by those within their departments.
With an open architecture design, data is accessible anytime, anywhere. This also helps companies lower their hardware and software maintenance costs by providing access to all company-wide data through a single application interface.
ERP Systems Increase Productivity
An ERP system is a must-have in any organization that needs to increase its productivity.
Implementing an ERP system can help drive as much as a 50% increase in your company’s productivity even if it’s implemented with the most basic of modules.
When you have access to real-time information about all areas of your business from wherever you are, it becomes easier for employees to complete their tasks more efficiently and faster leading to increased productivity.
For instance, a single employee who is responsible for inventory control now has immediate access to information stored on the network whether he is at a branch office or a remote location.
This allows him to track inventory levels across different companies and streamline processes by completing his duties faster and more accurately which in turn, increases productivity.
Removing Manual Processes with an ERP Software
An ERP system is designed to automate complex business processes so you don’t have to rely on manpower anymore for completing time-consuming tasks.
For instance, an employee responsible for creating quotes manually now has access to the information stored in the company’s database from a single application interface instead of going through each customer record one at a time and then having to enter them into a quote template by hand.
This reduces the time it takes him to complete his tasks and helps accelerate the sales process allowing him more time to seek new prospects which in turn helps your company generate more revenue.
In addition, with an ERP he can also manage existing customers better by providing them with accurate quotes right when they need them.
This allows him to improve the customer experience leading to increased customer retention and referrals which in turn, increases your company’s revenue even more.
ERP Systems Reduce Operating Costs
The use of an ERP system helps reduce operational costs by leveraging existing technology investments instead of having to invest in new software or hardware for each divisional department.
With an integrated approach, you won’t have information silos where different divisional departments have access only to their data, increasing productivity while reducing operating costs at the same time.
For instance, instead of having separate point solutions for managing inventory, payroll, accounting, etc Employees can now view all these processes from a single application interface that gives them real-time access to the information they need without having to switch platforms.
This reduces training costs, increases operational efficiency, and allows employees to get their jobs done faster which in turn, reduces overhead costs associated with re-training for each employee.
As you can see, an ERP system comes with so many benefits that businesses stand to gain from it in terms of increased productivity, better real-time decision making, improved organizational efficiencies, greater profitability, enhanced collaboration across the business which increases customer satisfaction and loyalty – among others. So if your operations are still on Excel spreadsheets or paper invoices then maybe now is the time for you to jump into the 21st century!