Looking for ways to streamline and improve your accounting practices? Look not further than an ERP!
Here are 5 ways that an ERP can help you improve your accounting:
1. Improve accuracy, and reduce costs, by using a fully-integrated system
You’ve heard it before, and you will hear it again — but one of the biggest advantages of an ERP system is that it is a fully integrated system that allows you to run your entire operation, including your accounting and finance departments, from a single system. Using one system makes your job easier, and saves you time, by eliminating the need to cross-reference and re-enter the same data into multiple systems and spreadsheets. A fully integrated system increases the accuracy of your accounting and financial reports by eradicating upload errors, input errors, and potential timing errors. You will also save the money you are currently spending on maintaining and upgrading multiple systems.
And another advantage of a fully-integrated ERP system is the choice it gives you. Love your current payroll system? An ERP system lets you choose to use external systems where they are advantageous and can be easily integrated into your main system, and use the ERP system for the rest. In this way you can create a system that is totally tailored to how you work. Without an integrated system there is no choice, and all processes have to be completed externally by disparate systems, eliminating the ability to create the perfect integrated accounting system for your team.
2. Work from a single screen
I don’t want to oversell this, but this tip may just change your life! Using a fully-integrated ERP system lets you work off of a single customizable dashboard that includes all the information you need to get your job done. You will be able to manage and keep tabs on various projects, accounts, and functions from a single screen, and always have a real-time snapshot of the KPIs, and tasks that are important to you. A good manufacturing ERP will allow you to create customizable dashboards for each department and each employee — letting you have access, within a single screen, to all the data you need, based on your job roles and responsibilities, to get your job done right. The dashboard collects information and data from across your organization, allowing you to click through and drill down into any information that you need more details about. Instead of wasting time searching through multiple spreadsheets or waiting for colleagues to send you the information you need, you will literally have all the data you need at your fingertips.
3. Speed up month-end close
Ahh, month-end close, all those time-consuming tasks you need to complete every single month to ensure your bookkeeping is in order. Studies shows that companies that use an automated and integrated accounting system, like an ERP, save on average 2 business days every month on their month-end close, over companies that rely extensively on spreadsheets. 2 days! By automating your processes and relying on an integrated system to speed up your accounting processes you gain 24 days a year in which your accounting and finance team can turn their attention to other tasks like pinpointing cost-saving measures or evaluating growth strategies — or maybe taking some much needed vacation days to avoid burnout (you probably didn’t think having an ERP system would help you find extra vacation days!).
4. Determine accurate job costing
Job costing is one of the biggest ways your accounting and finance team adds value to your organization. Job costing is important internally to your accounting team to properly prepare income statements, but is also of major value to your organization — and your bottom-line. Precise job costing not only tells you how much each job you take on actually costs you, it also helps you identify where you can become more efficient and save on costs, which can help you improve profit margins, or can be savings you pass on to your customers in terms of lower prices.
A fully-integrated ERP system lets you trace job costs throughout the production process and lets you gather information on costs such as the allocation of costs per employee wage rate/workcenter rate. Having this information at your fingertips (Remember tip #2? You can add job costing information to your customizable dashboard!) lets you drill down on costs, so you always know your exact job costs — and can make quicker, and better informed decisions about how to make your business more efficient and how to save money.
5. Make better decisions
The previous tip was a natural lead-in to this final way in which an ERP improves your accounting practices. With a fully-integrated ERP system you will be able to make better financial decisions for your company. Your ERP collects tons and tons of data from across your entire organization — harness it to create more accurate, more specific, and more timely financial reports. A good manufacturing ERP system will allow your finance team to create customizable reports around KPIs and industry-specific metrics that are important to you. Armed with this data, you will have a better financial picture and greater understanding of your business. You will be much better informed and learn where you are over-performing and under-performing, and make proactive decisions to improve your bottom line.
Armed with an ERP, and these 5 tips on how to use one to improve your accounting practices, you will be able to boost not only the efficiency of your accounting and financial departments, but your company as a whole!
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