How ERPs can help improve financial management for SMEs

If you are an SME, you may be considering introducing an enterprise resource planning (ERP) solution to your business. ERP software is a key tool for managing production, order processing and inventory.

We’ll begin by finding out more about what ERP is, then we will look at the benefits this can have for SMEs, as well as the best way to tackle ERP implementation.

What is Enterprise Resource Planning (ERP)?

An ERP enables your business to plan its resources: your entire accounting infrastructure can be managed by an ERP. Some ERPs also come with an integrated customer relationship management (CRM) platform. An ERP also monitors elements such as revenue, orders, materials, staffing and manufacturing capacity. ERP software will also manage your inventory, timesheets, and expense reports.

How can SMEs benefit from ERPs?

1. Better-informed decision making

Making good decisions in business requires you to have the necessary, accurate information available to you when you need it. An ERP allows you to access up-to-date financial information and data whenever you need it, in an easily-accessible format.

ERPs provide the data that allows decision-makers to compare sales figures and revenues of different months or years, forecast future sales, and make well-informed decisions that help to build a successful business.

2. Enhanced productivity

When you use an ERP, data from across all departments is stored on a single platform, making it easily accessible whenever it is required. This negates the need to manually contact employees from different departments to track down the information you require. It also means that your data isn’t stored on a variety of different Excel sheets, which can be inefficient.

ERPs encourage consistency in the work processes of all departments, and ensures all information is in one place and is accessible to everyone who requires it. Overall, this saves time, creates efficient processes, and enhances productivity.

3. Increased Control

Businesses who use different spreadsheets to store their data often find that this can lead to a lack of control over data. Human error can easily occur leading to mistakes in spreadsheets, and very often processes can vary between departments and teams. Furthermore, having information spread across different sheets can lead to loss and leakage of data.

SMEs often find that as their business processes become more complex and their transactions increase, their lack of appropriate integrated business software has a negative impact on their business. This is when an ERP should be introduced.

4. Greater Flexibility

In recent times we’ve seen unprecedented changes to how business works, and it’s now more important than ever for SMEs to be agile and flexible in order to adapt to market needs and conditions.

ERP software is excellent for providing the flexibility to adjust data, whether this is stock adjustments, amending sales figures, or cancelling orders.

Improved bottom line

Surely the primary reason for any business implementing any sort of software is that they hope it will have a positive impact on their bottom line.

When you use ERP software, you can scrap all your individual software management systems and instead just use one consolidated system for all your data, which should reduce costs overall.

Furthermore, increased control over your data and processes should mean that fewer mistakes are made: you should notice a reduction in lost orders, missed invoicing, inventory shortages and so on, all of which will have a positive impact on your bottom line.

Financial ERP Implementation

If you are considering implementing an ERP but are unsure of where to start, a professional ERP implementation provider such as Phase 3 can help.

Phase 3 are leading providers of professional and managed services for HR, Payroll and Finance technologies, including best of breed and integrated solutions and ERP. Phase 3 help clients to select, implement and manage their systems to enable them to get the best out of the technology.

If you are an SME considering introducing an ERP to your business, get in touch with Phase 3 today: we can advise on the best solution for your business, undertake ERP implementation, and assist with training and ongoing maintenance.

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Written by : Laura Lee

Laura’s role as Head of Marketing sees her continually looking for new opportunities to tell the world how great Phase 3 is.

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