A typical small and medium business owner chooses a minimalistic approach to digitizing their business processes. Consequently, the typical IT landscape of such a business is centered around accounting software and a host of spreadsheet-based or isolated applications to manage everything else – from customer and product databases to recording sales and purchase orders.
Although such a setup looks appealing from a short-term cost perspective, small businesses must start to look for better alternatives that give them the ability to integrate various business processes within a single ERP application.
1. Integration
Data silos lead to inefficiency, missed opportunities and departments working at cross-purposes. The primary, and maybe most significant, benefit of ERP is a central view of essential financial, operational and business data that can be shared across the organization in near-real-time.
ERP systems provide the means to develop business intelligence by turning that data into reports and insights that a company can use to re-allocate resources or capitalize on new market opportunities, among other actions.
2. Automation
ERP provides the ability to automate repeatable business tasks, such as payroll, order processing, invoicing, reporting and more. Automation minimizes the time spent on manual data entry, reduces errors and lets employees focus on more value-added tasks.
The nature of an ERP system means that data entered by one user is available across the organization. So, for example, an inventory tracking module could automatically trigger a shipment and invoice when a certain SKU becomes available. That translates into more revenue and a better customer experience. Or, line-of-business executives could automatically receive up-to-date reports on cash flow and other metrics to inform decisions.
3. Reporting
Better reporting is almost as important to executives as more effective data usage. ERP reporting modules compile information about business operations into reports that empower stakeholders to make more informed decisions, enhance business processes and identify problem areas before the business suffers. Reports may include visual representations, such as charts, graphs and dashboards, hopefully revealing trends and patterns to improve business results.
4. Tracking and visibility
ERP platforms allow companies to track, surface and understand business metrics—a powerful feature. They do this by facilitating companywide access to near-real-time data, breaking down information silos and offering reporting and analysis for every aspect of business operations.
5. Accounting
ERP accounting features deliver the ability to track, store and analyze financial data, such as accounts payable (AP), accounts receivable (AR), general ledger (GL), budgets and forecasting. Systems may perform more advanced tasks such as tax management, fixed assets management, revenue recognition and multi-currency reconciliation.
