Payment is at the center of every business. In an ideal world, businesses deliver a product or service and get paid immediately for this product or service. The reality, however, is that payment doesn’t always immediately follow delivery, and collecting payment can be a time-consuming process. Sometimes there even is revenue leakage from inaccurate billing.
Most businesses face the challenge of billing accurately and efficiently. For some lines of business, especially professional services and distribution companies, billing is an ever-present concern.
The good news is that technology can help—a lot. By using an enterprise resource planning solution (ERP), businesses can both ensure billing accuracy and make the process efficient. Billing and invoice management is a core function of ERP.
How ERP Helps with Billing and Invoice Management
There are five main ways that ERP substantially helps with billing accuracy and efficiency. These include process standardization, automation, real-time data access, enhanced reporting, and better integration.
1. Process Evaluation
ERP enables and enforces process standardization by automating processes and guiding employees through the necessary steps defined by a company. Standard billing processes help with both accuracy and efficiency.
By following defined, standard processes, billing accuracy is improved across an organization because steps are not missed or forgotten. Billing efficiency also is improved because employees don’t have to remember correct processes, and the most efficient process for billing and invoicing is followed every time.
2. Automated Invoice Management
ERP systems can automate the entire billing process from the creation of invoices to the collection of payments.
By automating invoice creation, businesses can ensure that invoices are accurate and consistent. ERP can automatically generate invoices based on predefined rules, reducing the risk of errors due to manual data entry. This significantly cuts down on revenue leakage from inaccurate billing.
Automating the entire billing process, including collection of payment, also improves efficiency. By automating the entire process, an ERP solution reduces manual labor and speeds up the billing process overall. Billing management is ideally suited for ERP automation, and it constitutes low-hanging fruit for any business that is not already fully digital with its backend processes.
3. Real-time Data Access
When a company uses a modern ERP system for its backend—which is to mean cloud-based ERP—it benefits from real-time access to data. This includes both data within a company, and often data from third-party services and platforms.
With this real-time data, a business can boost both billing accuracy and efficiency. Real-time data can be used to validate billing information, including pricing, discounts, and taxes. This helps to ensure that invoices are accurate, and that they reflect the most up-to-date information.
ERP systems also provide real-time information on the billing process, including outstanding balances, payment status, and invoice history. This information helps to streamline the billing process and enables companies to quickly identify and resolve issues.
4. Enhanced Reporting
ERP serves as the nerve-center for a business, which enables a complete picture of real-time operations. This visibility, combined with system-wide automation, helps businesses improve financial reporting that can greatly assist both with billing accuracy and efficiency.
An ERP solution can provide detailed reports on billing data, including invoice history, payment status, and outstanding balances. This helps companies quickly identify discrepancies and take corrective action, improving billing accuracy.
Businesses that use ERP also benefit from detailed reports on areas such as revenue, customer payments, and invoice aging. These reports can help to identify bottlenecks in the billing process and help organizations optimize their billing and operational processes for greater efficiency.
5. Better Integration
Most billing solutions enable some degree of integration with other software and services, but ERP brings together data from across an organization and integrates fully with just about any third-party software or service. This heightened level of integration is important for accurate and efficient billing.
By integrating with other systems such as customer relationship management (CRM) and accounting software, and centralizing all billing data including customer information, pricing, and payment terms, ERP helps reduce data redundancy, minimizes errors, and ensures billing accuracy.
Using a single ERP solution for all backend functions within a company also improves the communication between different departments involved in the billing process, including sales, finance, and accounting. This collaboration ensures that all parties have access to the necessary information to complete the billing process efficiently.
Do Your Billing Systems Need an Upgrade?
There’s a reason why finance and accounting departments often lead the push for migration to ERP; the benefits of ERP for accounting and financial management are pronounced, especially billing functions.
Discover why your business should be billing with ERP instead of manual processes or solutions such as QuickBooks.
Download our free guide, Comparing QuickBooks with SAP Business One, or contact one of our experienced ERP consultants by calling us at (801) 642-0123 or emailing firstname.lastname@example.org.