What is an ERP for Accounting?
In accounting, ERP is the acronym for enterprise resource planning. ERP could be described as a database software package that supports all of a business’s processes and operations including manufacturing, marketing, financial, human resources, and so on. In other words, the goal of ERP is to have one integrated system for the entire company.
How ERP is being used in accounting?
ERP is being used:
- to access, retrieve, process, supply, and manipulate a wide range of information
- to improve the productivity and efficiency of an organization
- to enhance a requisition and purchasing process
- to manage master data and financial transactions
- to understand the financials of an organization including accruals, liability, cash flow, and balance sheet management
- to automate a lot of accounting tasks including filing, financial reporting and financial analysis
- to fully use the functionality of commonly used accounting software
In certain accounts, computerized ERP systems are used to:
- File invoices and checks
- Receive cash and checks
- Pay bills (checks and electronic wire transfers)
- Manage the company’s inventory
- Provide the company management with real-time reports
- Keep track of sales activity
- Manage cash and bank deposits
- Compute and pay the employment tax of employees
What are the benefits of ERP for accounting?
In accounting, the main benefits being cited for using an ERP include the following:
- Lower total cost of ownership
- Improved service levels
- More timely and meaningful business intelligence
- Greater control and accountability
- Enhanced decision making
- Better customer satisfaction
- Reduced total cost of ownership
Total cost of ownership (TCO) is a good argument for using ERP. It is usually used in favor of off-the-shelf software for accounting. Having your own software is a costly affair. Custom ERP software is of a great help with putting IT resources to full use.
• Improved service levels
A well-designed ERP system keeps customers in the loop. It can provide good customer service and thus helps to increase the reputation of your business. The fact that a business is computerized could be a huge advantage as it means they have the ability to process orders faster and improve the personalization of the product offering.
• More timely, meaningful business intelligence
An ERP system should have integrated reporting functionality, allowing for greater and broader insight into information that will help you make the best decisions.
• Greater control and accountability
A good accounting ERP system offers a toolkit to monitor the corporate performance in both the short and long term.
• Enhanced decision making
ERP allows for improved planning, forecasting, forecasting, and analysis.
• Better customer satisfaction
ERP provides accurate information on the customer order to ensure customer satisfaction.
• Reduced total cost of ownership
ERP software can reduce the cost of ownership because its functionality means that some accounting tasks can be automated and the workload can be shared more initially, with fewer human resources required.
ERP is being used in Accounting in many different ways such as – to access, retrieve, manage and supply data, to automate accounting tasks and to make accounting processes easier and better.
This is not an end all solution, but it can certainly be very useful for you.