Does your ERP add the most value to your finance department?

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Enterprise Resource Planning (ERP) software is the jack of all trades for the modern business. It helps with the most important functions of a business: invoicing, payments, transactions, reporting, budgeting, purchasing, supply chain management, inventory management, human resources, etc. ERP software helps with almost everything.

Business leaders today understand the importance of not only having an ERP system, but also keeping it up to date and robust. In a survey conducted by The Hackett Group of supply chain executives, 44% had already implemented an upgraded ERP system or were in the process of doing so. In both cases, however, business leaders believed that powerful ERP software was essential.

Perhaps the most important application is that ERP software integrates large amounts of important information in one place. For something like accounting and finance, where reaching the right conclusions depends on the availability of all relevant information, businesses need a system of record: a place to collect, store, manage, and monitor all of their information. financial information as well as all other relevant business information. .

Without ERP for finance and accounting, businesses are left with an incomplete, inaccurate, or inefficient perspective of their own performance. No wonder 53% of the companies surveyed classify ERP as a priority sector for investments: it is considered a must, especially for practicing effective accounting and strategic finance. However, it is just as important as an ERP software to have the right modules and functions included. These elements make the difference between software and a real solution. For ERP to add the most value to the accounting and finance department, companies will need to strategically target their investments to create the strongest possible technology stack.

Essential elements of ERP

As crucial as it is to have a solid ERP solution in place, it is important not to rush with new investments and implementations without considering all the options. The ERP market is huge, and ERPs themselves are complete ecosystems of features, functions and datasets. Companies have the means to closely customize their ERP according to their needs and desires, which offers a lot of flexibility but creates the risk of creating a defective product.

Determining which key features to include in ERP software begins with a comprehensive assessment process. The aim is to clearly define the requirements and priorities. It is also important at this stage to solicit feedback from stakeholders in the business, both inside and outside the finance department. Ignoring feedback from people who depend on financial management tools can lead to poor adherence and poor adoption.

During the assessment phase, each company will come to different conclusions about which ERP features to include. Regardless of these choices, however, the features should offer robust reporting capabilities. Without quality reports, ERPs can excel at ingesting data, but then struggle to turn it into information that significantly affects decision-making. When evaluating a specific product, the evaluation team should pay special attention to how intuitive the reports are and how deep into the data they are.

In addition, the ability of ERP to integrate functionalities and systems is essential as connective tissue. It must transparently integrate the functionalities and data that reside inside the ERP. It should also connect existing third-party solutions, SaaS applications and software to the rest of the financial technology stack. It must become a single source of truth where any data, from any source, is accessible from a central hub that integrates everything.

When an ERP integrates well with other vendor’s platforms, rather than trying to replicate the same functionality, it saves time and money and allows the ERP to grow with it. the company. It also creates an end-to-end link between all data, which opens up exciting opportunities for automation and analysis. The evaluation team should not view ERP as a replacement for existing solutions, but rather as a centerpiece that weaves them together into a holistic picture of the company’s resources.

Optimizing ERP in finance

When introducing new technology, even an upgrade to an existing tool, people and processes matter as much as the software itself. Make sure the three elements within the finance department are aligned around the ERP using the following strategies:

Create a closed loop process – A closed loop process does not rely on external inputs (time or data) to move forward. These are especially important in accounting and finance, where processes that rely on external data or manual workflows can become inefficient before collapsing completely. To come full circle, everything must operate under the umbrella of the ERP system.

Adopt an Automation Strategy – Related to the previous point, when data flows through the ERP without encountering obstacles, processes become predictable enough to be automated. A job that used to take a lot of people’s time can now run on autopilot, complete faster, and generate fewer errors thanks to the way ERP weaves data sources and standardizes processes. Savvy businesses will adopt an automation strategy to make the most of what’s now possible.

Integrate the whole ecosystem – When an ERP is in place and easily integrates with a wide range of other solutions, it is important to build on this capability. Develop a plan to integrate the ecosystem as much as possible. Wherever there is a gap or missing link, work to fill it. For example, if ERP doesn’t offer something like automated payment processing, add it through the integration to further close the loop and speed up the flow of data.

Build a modern infrastructure – The finance department of the future needs a modern infrastructure to handle everything from the rise of remote working to the expansion of regulations to the explosion of data. Modern infrastructure is not only capable; it is accessible and functional in a way that gives users full access to all the data and tools they need from any location. ERPs can be the cornerstone of this infrastructure, but it’s not the only piece.

A fully integrated, high performing ERP system can be a competitive differentiator for the finance department. Likewise, the lack of ERP or the use of an insufficient system can be an operational obstacle that makes every initiative more difficult. It is clear in which category finance would rather be in. It is also clear how to get there.

Chen Amit, co-founder and CEO, Tipalti

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