Friday, February 26, 2021

5 Benefits of ERP Software for Accounting and Financial Management

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Enterprise Resource Planning (ERP) systems have become one of the most crucial aspects of every business. It's because they manage all business areas, including finance, marketing, sales, human resource, customer relationships, logistics, warehouse, vendor relations, and inventory. The best part about ERP software is that companies can purchase the base version and then supplement it with various modules as and when required. 


Today, when the world has become a global village, many businesses are opening branches/subsidiaries in different countries worldwide. Consequently, they have to adhere to government compliances and taxation laws. ERP software will allow you to manage accounting and finance according to a particular country's laws so that you don't fall victim to harsh penalties.


This article will focus on the benefits of ERP accounting software.

Get a Comprehensive Picture of all Financial Activities

The financial department of each business functions uniquely, but their main objectives remain the same, which include:
  • Increasing revenue
  • Enhancing profits
  • Decreasing operational expenses
  • Reducing labor costs
  • Promoting savings
  • Optimum fund acquisition

A finance manager has to handle various financial aspects daily, including:

  • Improving cost accounting
  • Financial forecasting
  • Predicting market movement
  • Defining company budget
  • Disbursing employee salaries

ERP accounting software integrates all the financial activities and provides a comprehensive outlook through a single window. This minimizes/eliminates the cost, time, and resources spent on using several tools.

Integrate Critical Data and Generate Useful Reports

ERP accounting software improves the financial data quality and provides an updated view of the organization. It synchronizes real-time data that makes it easy to manage the enterprise conveniently. It has numerous knowledge-sharing tools that break information silos and allow different departments to share critical documents at the click of a button. The ERP financial module tracks accounting data as per international standards that help create top-notch financial reports. 


The ERP accounting and financial module provide a framework in multiple currencies and languages, allowing employees working in different parts of the globe to coordinate effectively. 


Moreover, the ERP software collects critical financial data from all business departments and collate it to generate reports such as:

  • General ledger
  • Cash flows statement
  • Balance sheet
  • Statement of stockholder's equity

Collect Bills on Time and Improve Customer Interaction

ERP software will allow companies to manage the following critical financial functions conveniently:

  • Collect bills on time.
  • Create customer payment schedules
  • Credit management
  • Revenue tracking
  • Profit/loss tracking
  • Invoice tracking
  • Investment analysis
  • Budgeting

Another benefit of ERP accounting software is that it has a Customer Relationship Management (CRM) software that conveniently interacts with customers. The chatbot feature of the CRM software reminds customers of upcoming payments and also solves their queries instantly. 

24/7 Access to High-Quality Financial Data

ERP accounting software provides top-notch financial data at the press of a button. It organizes data systematically and optimizes resources judiciously. These benefits help businesses to enhance their bottom-line and promote future business ventures. 


Financial data includes sensitive information, which, if leaked, can cause significant troubles for the company. ERP software substantially increases critical business information safety by allowing access to only authorized stakeholders — frontline executives, C-suite managers, other business departments, vendors, suppliers, and distributors. Moreover, businesses need not maintain paper files and spreadsheets, which minimizes/eliminates human errors. 

Compliant with Global Accounting Standards

Stand-alone accounting software systems aren't compliant with global accounting standards. Thus, companies can land in big trouble if they don't adhere to mandatory compliances and government norms. On the contrary, ERP accounting software systems are GAAP (Generally Accepted Accounting Principles) compliant and GST (Goods and Services Tax) compliant that automatically deduct taxes as per the government rules and regulations. 

Conclusion

ERP accounting software systems help businesses in more ways than one. They provide a comprehensive picture of all financial activities, generate critical reports, enhance customer interactions, provide instant access to top-notch financial data, and make businesses compliant. Apart from managing accounting and financial data, ERP software encompasses other modules like customer relations, sales & management, human resource management, vendor relations, logistics, and supply chain. All in all, ERP software provides an all-in-one solution that helps companies automate their operations and maximize their profits.

Author Bio:

Nishant Joshi likes to read and write on technologies that form the bedrock of modern-day and age like ERP, CRM, Web Apps, machine learning, data science, AI, and robotics. His expertise in content marketing has helped grow countless business opportunities. Nishant works for Sage Software Solutions Pvt. Ltd., a leading provider of CRM and Best ERP Software in India to small and mid-sized businesses. You can follow me at Linkedin


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