Enterprise Resource Planning (ERP) systems help companies streamline their accounting needs through integration of data. It provides you with a better view of all areas of the business, and this enables you to make faster and more accurate decisions that affect the operations of your company.
Insight into financial data promotes cost efficiency and improves the financial productivity of the organization. This post will share with you some of the benefits you will have for using an ERP system for your accounting department.
Managing accounting needs
The accounting department of any organization is essential. There are many areas you can manage through an ERP system, and here are some of them:
- You can use an ERP system to estimate the capital requirements and for management of cash.
- You can accurately come up with a budget.
- Allocation of costs for various activities such as labor, raw material, and transportation.
- Management of payments, including those made to the vendors and paying wages to staff.
Tracking capabilities
ERP system gives you an opportunity to use it as a financial management system. It improves financial activities such as customer payment schedules, credit management, and revenue tracking.
It’s easy to manage billing, revenue, and payments as it has a high level of tracking capabilities and it’s an automated system, Even better, you can use an ERP system to track profits made by the organization, invoicing, cost analysis, and budgeting.
Quality data and financial information
With ERP technology, the accounting department has easy access to the data. Organizations have well-organized processes and resources, enabling them to maintain good financial measures. Financial information is also secured and it gives you an opportunity to co-author, manage, and edit when you have authority to access it.
Organizations that use separate systems for accounting and sales activities, they have to manage the data manually. On the other hand, for an integrated ERP system for accounting, there is an automatic transfer of data. Therefore, you don’t have to manage data manually, making it faster, accurate, and consistent.
Automated data
Organizations with automated systems are able to grow their businesses because they have the flexibility to concentrate on their core operations. An ERP system ensures that your accounting is automated.
It simplifies operations related to accounts receivable, accounts payable, improves cash flow problems, and cash management. It becomes pretty easier to manage the entire organization by generating information and compiling it.
You can use financial management modules that will keep track of accounting data that are in line with the international standards. For this reason, you have options of choosing a framework in different languages, charts of accounts, and currencies.
ERP system helps you to collect financial data from various departments to create reports and financial statements. This is the reason why the system is invaluable as it makes the processes easier to perform.
Fewer errors
There is always a chance that a person can make a mistake while manually capturing data. By losing focus and losing key entries, it can cause problems on your accounting. Incorrect accounting data will affect the quality of financial analyses and financial reports. This mistake can have bad consequences on your finances including the tax complications.
An ERP system for accounting prevents such errors from happening because the system is automated. This gives you accurate information on the financial situation of your company.
A full ERP system is also GAAP compliant. GAAP refers to the accounting standard that offers a standardized method for recording financial transactions. Therefore, a full ERP system assists you to practice financial reporting that are acceptable by various accounting standards such as GAAP.