How having an ERP system makes accounting easier

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Often, the first sign that your company needs an ERP system will come from your accounting department.

If your accounting department relies on paper-based invoices and sales orders, multiple spreadsheets, and disparate accounting systems, your staff is wasting dozens of hours every week manually entering (and re-entering) data into different accounting and sales systems — something ERP software can do in an instant.

The same goes for financial reporting—if it takes a lot of time to consolidate or reconcile financial information across multiple systems and countless spreadsheets, an ERP system can have a significant impact on your accounting department. With all financials in a single database, accounting staff won't have to spend hours cross-referencing and re-entering information, rekeying numbers, or reconciling data manually. Your accounting staff will be more productive, and have time to focus on delivering critical reports and other key tasks, without delays and frustration.

Accounting Software — and More

An ERP system includes all of the key features of an accounting software package in one place — accounts receivable, accounts payable, payroll, and trial balances. And can handle all of the activities your accounting department needs to take care of like billing, sales orders, purchase orders, the general ledger, timesheets, expenses, and electronic payments. Having all of your accounting and financial information in the same place will save your accounting department time, let them better manage key accounting tasks, and do big jobs faster — like close out a month in almost half the time it used to take.

But an ERP will do more. Not only will an ERP give your company all of the benefits of an accounting software system, an ERP system is a resource management system that doesn’t just manage a company’s financial information but one that also tracks tangible and intangible assets, human resources, and materials. These are not financials in and of themselves, but they all have a big impact on a company’s finances — which makes them essential to your accounting department. Having an ERP, which will connect your accounting department to the other departments and divisions of your company will improve your accounting departments ability to produce detailed and accurate financial reporting, and help you better understand which business lines and projects are profitable.

Real-Time Review of Data

ERPs let you have company-wide, real-time data all housed in one place. Not only does this make it easier to keep a finger on the pulse of company financials, and manage every aspect of the accounting process, it also lets you manage and review costs more accurately. By offering the ability to scale production, accounts payable, accounts receivable, and inventory to exact specifications, costs can be more carefully balanced over time, and configurations can be tweaked to meet an ideal financial environment.

Set Costing Standards

ERPs can also assist accounting by helping set standards. By taking the cost of manufacturing and any related expenses and providing a clear baseline, expenses for any project can be more easily reviewed and adjusted to meet expectations. With the ability to quickly identify and address cost variances, you can easily assess exactly where and why the variance is happening and correct the problem before it begins to cut into profits. If the costs are cheaper than expected, then new standards can be set, allowing you to more accurate estimate and predict the cost of a job.

Make Better Decisions

Being able to predict and estimate accurately is vital to creating a successful financial plan. An ERP system lets you use historical reports and current cost analyses to create financial models and compare alternate budgets and costs to find the best financial plan for your business. Management is armed with better financial reports from your accounting department, and has a better understanding of your company’s financial situation, with more accurate profitability predictions. Being able to report profitability information all the way down to the customer, job, and product level, lets you make more informed decisions, and lead your company in the right — and most profitable direction.

An ERP system makes accounting easier, helps you better understand your company’s financial situation — and will ultimately make you more profitable.

Anne Mulvenna

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