The finance module is often the first to be activated when a company deploys an enterprise resource planning (ERP) tool. This makes it the most important module of an ERP solution.
What Is an ERP Financial Module?
An ERP financial module—such as SAP Business Bydesign Finance—is the part of an ERP solution that helps businesses manage their finances. It includes features for accounting, budgeting, cash flow management, and more. This module is designed to streamline financial operations and improve decision making.
In addition, it helps consolidate financial data from various departments and locations. This gives you a clear picture of your company's financial health, and allows you to track spending, monitor revenues, and make better decisions about where to allocate resources.
What Are the Components of an ERP Financial Module?
There are several components of an ERP financial module, including:
- General ledger–the main component of the finance module, which stores all your financial transactions and provides a way to monitor and manage them
- Accounts payable–helps you keep track of money that you owe to suppliers and other creditors
- Accounts receivable–lets you keep an eye on the money that is owed to you by customers and other debtors
- Cash management–includes features for tracking receipts and payments, as well as forecasting cash needs
- Fixed asset management–helps you oversee your company's fixed assets, such as equipment and real estate
- Financial reporting–provides tools for creating financial reports, such statements about actual and expected sales; when displayed as graphs, it allows managers to quickly assess the financial state of their department
- Risk management–helps you identify and manage risks to your company's financial health, and includes features for identifying, measuring and managing risks
- Tax management–consolidates tax information from various departments and locations into a single platform, and can be used to prepare tax returns and help you manage your tax liability
How Can an ERP Financial Module Benefit Your Company?
An ERP financial module can benefit your company in many ways, such as reducing costs, improving decision making, and strengthening compliance.
An ERP financial module can help you save money by consolidating financial data from multiple departments and locations. This can avoid duplicate data entry and reduce the need for manual reconciliation of records.
Improved Decision Making
Another important benefit of an ERP module is that it can help you make better decisions by giving you a clear picture of your company's financial health. It can also help you track spending, monitor revenues, and make better decisions about where to allocate resources.
Financial regulations get stricter by the day, and an ERP financial module can help you comply with them effectively. By consolidating financial data from multiple departments and locations, you can ensure that all your financial information is up-to-date and compliant with changing regulations.
An ERP financial module can also help you integrate your financial operations with other parts of your business. For example, if you use an ERP system to manage inventory, you can use the financial module to track inventory costs. This can help you make better decisions about pricing and product mix. You can also check out our recent post on ERP integrations to better understand how your ERP system can integrate with other business tools.
Digitization of Financial Documents
Because all financial data stored in an ERP system is digital, an ERP financial module reduces your dependency on physical documents. This reduces the risk of lost or stolen documents and improves the security of your data.
Improved Employee Productivity
Last but not the least, an ERP financial module can prove critical to boosting productivity by automating tasks that are tedious and traditionally done manually. For example, if your employees spend a lot of time reconciling accounts receivable and accounts payable, an ERP system can automate this process. This can free up your employees' time so they can focus on more value-added tasks.
An efficient ERP financial module can help your company accurately and effectively manage its finances. Understanding all components and effects of such a module is vital when implementing an ERP system, especially if your company has prioritized improving and tracking all aspects of its financial health.