Financial management software provides businesses with a full array of accounting functions to record daily financial operations and generate quarterly and annual financial statements. It also provides tools for reporting, analysis, budgeting and planning. But do you really want reams of reports? No. What you really want is data.
The right ERP system pulls everything into one focused dashboard, so you move from the informational nature of reports to the transformational impact of data. And, a dashboard will provide visibility across the business with the press of a button, saving hours of time.
Why ERP?
One of the biggest drivers for companies to take on an ERP implementation project is to improve efficiency and profitability. The right ERP system pulls everything into one focused real-time dashboard.
Processes are streamlined and accurate, automating functions through an ERP system will knock out pain points. And these can be future-proofed with some forethought. What worked when you were, say, a $5 million company, is insufficient now that you’ve grown tenfold.
Another driver that took on additional importance over the last two years is the ability for your business to tackle supply chain challenges. Quite simply, you have to know when inventory is coming.
In terms of revenue, the goal is faster, better decision making through leadership informed by a timely and accurate picture of organizational performance. The right ERP system can free you up from manual processes and can drive financial management that is critical to:
- Streamline operations – From hiring in a tight labor market to the plant floor, it’s essential to achieve maximum efficiency.
- Manage multiple entities – With different divisions, locations and product lines, you need instant insight into performance anywhere in your organization.
- Single version of the truth – Multiple, disparate systems are no good;
- Meet investor expectations – It’s common today for investors to require speed to scale and be provided data in an instant.
We know that ERP solutions help reduce waste at every level of the enterprise by streamlining processes and making them consistent across the organization This, in turn improves data analysis and insight to revenue streams. This business intelligence can help you identify emerging patterns, allowing you to make better tactical and strategic decisions to reduce costs and enhance revenue.
Clear revenue reporting will affect your executive decisions, compliance, tax liability and the confidence of your investors.
There is no universal reporting model or software solution that works for all companies, but while mapping out your ERP project, there are a few considerations that will impact which system will meet the capabilities needed for your ideal revenue reporting.
Plan your reporting strategy
Developing a reporting strategy prior to implementation will ensure maximum benefit and desired outputs are achieved. The implementation team must first decide what information, or business intelligence, it needs out of the system before starting the project. Changing critical reporting requirements once implementation has begun, can be costly and time-consuming.
Data driven decision making
Disparate origins of reports lead to more time-consuming work. An ERP system gives you one login to a dashboard that shows you the immediate health of the business. Any noted variances can be seen instantly. Intelligent decisions can be made, because you can get to the data quickly. Because ERP systems integrate a suite of business applications, all sides of the business have insight to performance.
To get the most revenue possible as your business grows, you need insight. The right business intelligence provided by the ERP system can show you what products are taking off and may require new strategies to fulfill customer need, synchronizing production with customer demand. Setting KPIs based on data ensures accuracy and accountability.
Plan reporting hierarchy
If you set up the financial reporting hierarchy in the system to align with budgeting, you can realize consistency and better compare what you plan to spend against actual spend. With mindful planning, the hierarchy can be configured to accommodate operations’ reporting needs as well as internal and external financial reporting within the same structure.
With data security ranking as a top concern, be sure to assess who needs access to the system. Who needs what information?
Be sure to think of long-term growth now
We all know that data is our friend and can also be our worst enemy if it’s not accurate. Before launching any ERP implementation, go through a rigorous data cleansing effort. When you have clean data, you have a foundation that can handle new data that may come into the system through a merger or acquisition, or simply adding new customer information.
Think through what kind of information you want from your reports not just today, but a year from now, five years from now. Look at systems that are scalable and repeatable. What are the processes in your organization that are the most important and replicable? What are the most important performance indicators? As powerful as an ERP system can be, remember that even though you can see a lot of information, the greatest information is what we should be focusing on.
Setting up parameters in the ERP system now to meet revenue reporting requirements in the future is a must. Financial features you should look for include:
- Streamlined Processes for Review and Approval of AR Invoices, Credit Memos and Debit Memos
- Improved Loading of AR Documents for Cash Application
- Automated Cash Application (where appropriate)
- User-Defined Fields are supported for Customers
- Sales Tax Support in Accounts Receivable
- Improved Identification of Inappropriate Discounts Being Taken
- Collections
- Payment processing
When considering which ERP software system and consultancy partner to select, remember that you are looking for the best path to data. Running reports is time-consuming at best, and not insightful enough at worst. Savvy CFOs and finance leaders must consider the value-add that an ERP system provides, teeing them up for success.
Why Crestwood?
At Crestwood Associates, we are software agnostic. Our experienced consultants have been advising clients in a range of industries for more than 20 years. Through over 5,000 ERP implementations all over the globe, we’ve learned how to help companies like yours avoid pitfalls and achieve success.
- We have a strong and deep team to support the complexity of an ERP implementation.
- We have experts in various avenues who can help solve problems on complex projects.
- We do not outsource any aspect of the project, saving time and money.
We advise key stakeholders on which technology solutions will have the greatest impact on your business goals by reviewing your system and processes. We then quantify the goals and map out a plan for action to achieve them. Contact us today for an ERP Discover and Advise Consultation Request.
