As more ERP systems are integrating into the cloud, companies are gaining increased value in overall enterprise management systems. ERPs allow your company to coordinate and integrate with a variety of enterprise cloud applications, analytics, inventory, and warehouse management tools. Additionally, ERPs have proven invaluable in gathering and transmitting data between enterprise cloud applications to manage critical business processes via KPIs and dashboards. As technology transforms to meet the needs of modern businesses, ERP systems continuously develop to offer valuable business data, especially for financial teams and workflow management.
Why is Financial Planning Important?
Forecasting financial data is an important process because it allows management to review an organization’s current financial state by comparing actual and projected financial figures. Financial planning gathers information on a current fiscal year’s actual data and analyzes various outcomes and forecasts. Using ERP ensures your collected data is accurate, which is important as a financial forecast is only as reliable as the data gathered.
Traditionally, gathering actual data and analyzing variances is a burdensome task that shifts focus away from financial planning’s primary role of forecasting. Using an ERP system allows your company to streamline these processes, ultimately saving your financial team time. ERP software can be designed to forecast and record data, configure the actuals into financial planning models, and provide financial planning training for variance explanations.
Accuracy
One of the most important factors in a successful business is its ability to successfully and accurately manage its financial data. ERP financial management software helps to streamline your processes, increase accuracy, and reduce costs. When financial processes are automated, analytics offers valued insight and management decisions efficiently made.
Additionally, ERP systems are used to prevent errors in accounts and observe company activity.
ERP systems concentrate overall business and financial data, allowing users to gain a comprehensive view of their business and provide insights that would have otherwise been missed.
Ensuring Regulations Are Met
Presently, financial teams rely on ERP systems to ensure compliance with government regulations concerning data, operations, and transparency. Qualitative ERP systems are entirely integrated with a company’s important back-end information including units of sales, order management, shipping, receiving, and manufacturing. ERPs are able to ensure various safety and financial regulations are met. Through customization, companies can be alerted of vendor recalls and unusual financial spending activities. Being able to monitor data in real time allows financial professionals to ensure efficiency from anywhere in the world, as a benefit of a cloud integration.
Additionally, a full ERP system is also Generally Accepted Accounting Principles (GAAP) and Generally Accepted Auditing Standards (GAAS) compliant. GAAP is a common set of accounting rules and standards that dictate how financial statements are prepared. Public companies, nonprofit organizations, and government entities are required to prepare financial statements in accordance with GAAP. GAAS is a set of systematic guidelines used by auditors when conducting audits on companies' financial records. GAAS helps to ensure the accuracy, consistency, and verifiability of auditors' actions and reports. It is important a company maintains these strict guidelines throughout their business practices to ensure financial wellness and legitimacy.
View Data Real-Time
ERP systems allow for transactional information to be made available for immediate review via real-time dashboards. Because of increased capabilities, financial teams are able to have complete financial visibility over a company’s receivables and payables. Additionally, they are able to gain a comprehensive overview of sales forecasts, inventory levels, and bookkeeping functions to help ensure profitability.
Improve Overall Business Performance
Facilitate Procure-to-Pay and Order-to-Cash Processes
- ERP allows for all possible errors to be eliminated by ensuring GAAP and GAAS compliance
- ERP allows financial professionals to spend less time on data consolidation and more time on data analysis, providing useful information for business decision making
- ERP data allows businesses to gain strong fiscal control
Data Retrieval
- Manually retrieving and uploading data into the financial planning tools often leads to errors or outdated data in the forecast model. ERPs eliminate these errors by continuously collecting and analyzing data by using various formulas to ensure various accuracy
- ERP software ensures accuracy and up-to-date information for financial forecasting and ease of generating reports. Instead of spending hours compiling data that may be incorrect, analysts are able to generate reports within minutes and set up customized dashboards based on their preference
- ERPs significantly decrease the risk of invalid data in forecasting models and allows financial planning to shift their focus from validating manually manipulated data to forecasting financial data
Training and Knowledge
- A critical part of the financial planning process is analyzing and explaining variances between forecasted and actual data. ERPs store this information, which can be used as a training tool for new analysts
- ERP systems like NetSuite are fully customizable based on company preference. Your financial teams are able to create dashboards with information they continuously use and customize reporting capabilities based on their workflow
- ERPs allow analysts to closely identify and monitor uncommon activity and prevent fraudulent transactions and behavior
- With training on the ERP layout, financial planning can articulate how ERP changes will adversely affect the forecasting process and reporting requirements
Additional ERP Financial Features
To exist in today's business environment, companies need to adapt to new technologies and increase effectiveness throughout all sectors. ERP software allows for companies to integrate other software such as CRMs or PRMs into their day to day workflow, furthering improvement to their day to day processes. There are many additional ways a company can benefit from implementing an ERP, including:
- Integration with a CRM that provides users additional data and the ability to store necessary information about clients, their credits, and financial reports pertaining to them in one cloud-based space
- Using an ERP for a reduction in paperwork and streamlining financial planning processes and procedures into an efficient process
- Using fixed asset management to allow for quick control and tracking of non-deprecating or depreciating company assets
- Budgeting, forecasting modules, dynamic assumptions, and formulas to ensure accurate future prediction and budget planning through the use of financial modules.
- Private team collaboration and discussions for an experience that allows for diversification in financial procedure planning
ERPs are a strong tool for financial planning professionals to utilize in their day-to-day. By aligning actual and forecasted reports and projections through an ERP software, information can be shared throughout the company and federal regulations can be met. ERPs allow for streamlined financial management that ensures a company stays on top of all their financial back office operations. By partnering with an agency to set up your ERP, you are ensuring the scalability and growth of your financial operations. ManoByte has experts ready to streamline your company’s financial processes.
