Financial data like cash flow management, budget estimates, etc. need to stay updated. It allows your business to make informed core decisions. Proper handling of accounting & financial aspects of the business is crucial to ensure it drives profits and allows the business to expand.
Enterprise Resource Planning (ERP) systems are software applications that allow businesses to integrate and manage all of their core processes in one system.
ERP systems can bring numerous benefits to accounting and financial management, some of which are:
- Improved Financial Reporting: ERP systems provide up-to-date and accurate financial information that can help organizations make better financial decisions. For example, the system can generate financial statements, balance sheets, income statements, and cash flow statements in real-time.
- Better Cash Flow Management: Your business can improve its cash flow management with access to real-time financial data, including accounts payable and accounts receivable. This helps businesses track cash flow and make more informed decisions about when to make payments and when to collect payments.
- Automated Financial Processes: ERP systems automate financial processes such as accounts payable/receivable, general ledger, and inventory management. This reduces manual data entry errors and improves accuracy in financial management.
- Reduced Costs: It helps to reduce costs by automating routine accounting tasks, allowing accounting teams to focus on higher-level financial analysis and strategic planning. Additionally, the program helps businesses streamline their financial processes and reduce the need for multiple software applications, reducing IT costs.
- Improved Efficiency: Access to real-time financial data and streamlining financial processes improves efficiency. This allows businesses to identify areas of improvement and optimize their financial management.
- Better Risk Management: ERP systems help businesses manage risks by providing real-time data on financial performance and automating internal controls. For example, the system can monitor cash balances and flag any unusual activity or transactions.
- Improved Regulatory Compliance: Businesses comply with financial regulations by providing real-time financial data and automating regulatory reporting. This reduces the risk of errors and ensures that businesses are meeting regulatory requirements.
Popular examples of ERP systems include Business Central and NetSuite. These systems can be customized to meet the specific financial management needs of different organizations. Nevertheless, in terms of accounting and financial management is their approach to managing financial data. Read in detail about Business Central vs NetSuite on Thread Gold Consulting Blog.
Business Central is a Microsoft product that has a more traditional approach to financial management. It has a general ledger and accounts payable and receivable modules that allow users to manage financial transactions, create financial reports, and monitor cash flow.
NetSuite, on the other hand, is a cloud-based ERP system that offers a more integrated approach to financial management. It includes features such as budgeting and forecasting, revenue recognition, and project accounting, which are all interconnected with the general ledger, giving users a more comprehensive view of their financial data.
So, while Business Central may be a better fit for small to mid-sized businesses with simpler financial needs, NetSuite may be more suitable for larger businesses or those with more complex financial requirements.
