What is ERP in Accounting – What Does ERP Stand for in Accounting?
Enterprise Resource Planning or ERP is an integrated software package that is meant to assist in the optimization of all business functions for a company. Some of the business functions easily managed by the system include ERP accounting, financial management, accounting, operations, sales, customer service, warehousing, and other departments. By offering a unified and central control system to monitor and control all the business functions, ERP offer businesses a better way to ensure optimal business performance. Many modern ERP systems are even capable of dealing with customers’ or vendors on its own, essentially automating the process of supply chain and customer service to increase efficiency and sales.
Perhaps, the best advance of the ERP system is its capacity to create a centralized data repository, from where data can be accessed by the entire team with the relevant permission levels. This approach also eliminates the traditional “Silo” approach where the data is entered into the system using different software packages used by different business departments; making it inefficient and difficult to maintain the integrity of the data. With an integrated ERP accounting system, businesses are able to track transactional details of the business faster and with more accuracy. Also, by automating the entire transactional process, ERP accounting software enables businesses to reduce overhead costs, while improving department efficiency with fewer errors. The system also enables “Permitted” persons of different departments to access the data they need in real-time; thereby reducing the operational lags and improve productivity.
The only downside of the ERP system is the complexity of its implementation. A great deal of time and resources are required to implement the system with existing infrastructure and for data transfer. Also, since there are specific ways to implement ERP systems, many companies will have to transform traditional operating procedures and adjust to new procedures. All of these are large organizational changes, which require a significant amount of time and resources from the company for implementation, as well as, training of employees for the new system. However, while implementing an ERP system may pose difficulties due to lack of in-house resources, the best route for companies is to hire professional ERP implementation agencies for a seamless and hassle-free implementation process.
ERP accounting software or ERP in accounting can be described as an integrated software with a centralized data repository that is able to support all the accounting needs of the business including marketing, manufacturing, sales, supply chain, business intelligence and others. In other words, ERP accounting software is an integrated system that connects with all other business functions to accurately store and manage the transactional history of the company for better financial management and regulatory compliance.
And since the integration of the company’s entire data from across the department is a complex and intensive task, the ERP accounting software needs have robust features and functionalities to handle these tasks, as well as, demand a strong commitment from the company’s executive to pool in resources for the implementation of the system and training of employees to utilize the full potential for the business.
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Folio3 offer businesses of all sizes and shape with a seamless and integrated ERP implementation process. Our proven methods and deep expertise in the industry ensure you are able to implement the ERP accounting system as per your business needs and requirements. Our FastTrack F&O solution is meant to accelerate business growth by taking a phased approach for ERP implementation and can be customized to meet different business needs including payroll, accounting, human resources, and financial management.
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Benefits and Advantages of ERP Accounting Systems for Startups
It is a common misconception with most startups that ERP accounting systems are only meant for large businesses or enterprises. In reality, ERP accounting software is equally advantageous for startups and can help them greatly in optimizing their accounting department, as well as, keep up with regulatory compliance. Below we have come up with some of the benefits of ERP accounting software and how it can practically enable startups to optimize their accounting function.
Time-Saving
With a robust ERP accounting software, startups are in a better position to efficiently manage accounting needs and optimize workflow processes by eliminating the traditional data “Silos”. By implementing an ERP accounting system, startups also get to leverage more accuracy and transparency for their accounting functions. Not to forget, it greatly reduces the time required to manage accounts from hours to minutes. Modern cloud-based ERP accounting systems also enable real-time remote access to data; thus greatly improve the efficiency of the startups.
Improved Accuracy
Apart from increasing the time efficiency for startups, ERP accounting systems also greatly improves the operational efficiency of the business. The accounting industry is a heavily regulated industry and startups with limited experience and expertise need to be extra cautious for the compliance requirements. With a robust ERP accounting system, startups can relieve themselves from the compliance issues, as the system offers greater accuracy and transparency into the financial and accounting details of the business. By automating the data entry and analysis process, the system greatly eliminates the chances of any errors. Also, by leveraging advanced analytical and calculation features of the ERP accounting software, companies can be sure of precise data even for the most complicated tasks.
Cost Reduction
By automating the various functions related to the accounting needs of the company, accounting ERP software significantly reduces the overhead costs for startups for human resources, as startups would no longer be required to hire a separate resource for managing the books or creating the invoices. Also, with cloud-based ERP accounting solutions, startups are able to pick and choose for the features they want to use, thereby, significantly reduce the first-time investment required for the implementation of the system.
Easy Tax Filing
As said earlier, accounting is a heavily regulated industry and startups need to comply with all accounting regulations; especially tax compliance. Again, given the limited expertise and experience, tax filing can be a complicated task for most startups, as they often struggle to keep track of all their invoices and transactions. With a roust ERP accounting system, startups now no longer need to worry about the tax filing, as the system automatically keeps records for all the transactions and invoices, ensuring a smooth and precise tax compliance process.
Streamline Integration
The modern finance management tools available in the market offer various integrations that can be leveraged by the startups for optimized and easy management of different business functions. While these integrations are a great way to optimize business functions, managing different software packages can be challenging for many startups. Alternatively, the ERP system already comes with integrated solutions and doesn’t need a separate system for different business functions. All you need to do is to integrate the necessary module you need to handle different business functions and keep monitoring and tracking the performance of all business functions through an integrated system.
Benefits and Advantages of Accounting ERP Software for SMEs and Enterprises
Apart from startups, ERP accounting systems also offer great benefits to SMEs and enterprises. In fact, today more and more organizations are implementing ERP accounting solutions to optimize their accounting functions to increase efficiency, higher accuracy, and smarter regulatory compliance. Below we have come up with some benefits of accounting ERP software for SMEs and Enterprises:
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Tranquil Reporting
ERP accounting system offers various reporting features simultaneously to businesses. Most of the ERP systems for accounting comes with the built-in functionality of data analysis and reporting, which is an essential need for the accounting departments. By automating the data analytics and reporting function, ERP systems greatly reduce the time and hassle involved in the process and thereby results in greater productivity for the businesses.
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Seamless Invoicing
Creating invoices is definitely a tedious task for most businesses and one that’s frequently plagued with errors. With ERP accounting software, it becomes simple for enterprises and SMEs to automate their invoicing process without any errors. All you need to do is to enter the data and the system will generate reports with few clicks.
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Financial Statements
A financial statement is an important business document that records the profit and loss of a company. The financial statements are analyzed and evaluated by all the organization’s stakeholders to assess the health and performance of the business. With an integrated ERP system implemented, it’s easier for businesses to manage and record all relevant information in the financial statements, which subsequently be accessed by all permitted stakeholders.
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Scalability
Last but not least, the ERP accounting system enables businesses to scale as and when they are ready. Unlike traditional “data Silos” that greatly hinders the scalability of the business, ERP systems support and assist the growth of the business without any need to invest in new software or to start all over again.
FAQs:
Does ERP Include accounting bookkeeping?
Yes, implementing a robust ERP for accounting will include functionality for accounting bookkeeping.
How does ERP help accounting?
ERP system automates the redundant and tedious processes involved in the managing the accounts function of a business, thereby, it not only saves time but also reduces the cost of operations, as well as, improve the accuracy of the accounting practices; all of which subsequently leads to increased productivity and more revenue for businesses.
