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Improve Cashflow with Automation and Real-time Insight

The bar has been raised on financial and cash flow management.

The always important task of managing a company’s financials and ensuring adequate cash flow and inventory first was assisted by the rise of spreadsheets and affordable computing, but another shift in financial management has taken place over the past decade. This shift is the emergence of cloud computing, widespread automation, and affordable end-to-end enterprise resource planning solutions (ERP).

Large enterprises have long had sophisticated financial management systems as a result of ERP, but the trends above have begun enabling smaller businesses to do the same thing. This shift has made deeper financial insight and more sophisticated financial management the norm, not the exception for the average business. What holds a business back today in a financial management sense is not access to the tools, but the confidence to use them.

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Why ERP is a Financial Game-Changer

ERP systems are end-to-end business software solutions that encompass and track all areas of a business. First used for manufacturing, ERP systems today handle everything from inventory, logistics, and human resources to sales, accounting, and financial management. They serve as the backbone for modern businesses, and cloud-based ERP solutions such as SAP Business ByDesign have made them accessible to any business with more than a couple of employees.

The bar is raised significantly for financial management because these ERP systems see and track all business activity in real-time, enabling much more precise cash flow and financial management. Specifically, they improve supply chain and inventory optimization, reduce accounts receivable times through automation and visibility, improve forecasting, enable real-time reporting, and open a more precise window on a company’s sale pipeline.


Supply Chain and Inventory Optimization

Supplier relationships are always important from a financial management standpoint, especially with today’s disruptions from the covid pandemic and retreat of the global economy. ERP solutions help businesses better control and monitor their various supplier relationships and optimize costs among tier 1 and tier two suppliers as deeply as the SKU level. In many cases, a company’s ERP solution can even correct directly with supplier systems, automating pricing and availability functions in real-time.

This added visibility and control of supply chain and inventory management can be a boon for cash flow optimization and the correct allocation of purchasing among numerous suppliers.


Real-Time Automated Reporting

Because all business activity is captured within an ERP system at the time of execution, ERP systems also improve cash flow and financial management by giving access to real-time reporting. ERP systems capture a moment-by-moment awareness of a company’s financial picture, so CFOs and other key stakeholders can monitor and track financial performance on an as-needed basis. This alone makes ERP a game-changer for financial management because there’s no delay in accessing business performance data.

Reporting also is improved by automated report generation that can be configured to calculate just about any financial data needed by a business. ERP solutions come with standard financial reports similar to those found in financial management platforms such as QuickBooks and Xero, but they also can be configured to generate just about any report needed for a given business. Because of ERP’s flexibility and end-to-end awareness of all areas of the business, CFOs and business owners often find they can create reports with deeper visibility and more utility for their given line of business.

Whatever reporting is needed, ERP can provide it—and automate it.


Sales Pipeline Visibility

This added visibility from ERP extends into sales activity as well.

Sales activity can be captured within an ERP system at the time of transaction. The deal status also can be monitored and tracked within the system for a much greater level of visibility into the financial outlook of a business. Calculating expected revenue and seeing the direction of sales not only can happen at the end of a quarter, it also can take place at any time due to the real-time nature of the system.

This increased visibility provides added opportunities for adjusting financial decisions during the normal course of business, which can lead to more sophisticated financial management.


Shortened Accounts Receivable Times

Most modern financial management platforms and a plethora of banks and financial services now offer automated invoicing and basic accounts receivable management. But ERP takes this now-standard automation to a much deeper level.

That’s because ERP has a complete picture of a business and hooks for deep integration with third-party systems, so it can automatically tie into a company’s sales pipeline, inventory systems, and online eCommerce solutions for end-to-end visibility and automation of the invoicing and accounts receivable process. With this extra integration, businesses can set up more precise and automated processes for monitoring, issuing, and reminding about payments due.

With a complete picture in real-time, it also is possible to spot accounts receivable trends more easily, and adjust processes accordingly.


Sophisticated Forecasting

Finally, ERP is a financial game-changer because it allows for more sophisticated financial forecasting than is possible with spreadsheets and financial management platforms such as QuickBooks.

The ability to monitor the full range of dynamics within a business in real-time, and store the entirety of past performance across a business for analysis, makes ERP a financial forecasting powerhouse. Most modern ERP solutions also come with forecasting baked in, some of it taking advantage of artificial intelligence and machine learning. Third-party forecasting tools can be easily integrated with data from the ERP solution as well. Still unsure about the value of ERP for cash flow and financial management? Download our free guide, Understanding Cloud ERP, or contact us at (801) 642-0123 for more info on how ERP can help with financial management.

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