8 Ways an ERP System Benefits CFO Decision-Making

Today, a CFO is much more than just being a number man! CFO now is a strategic partner who can forecast, plan, and oversee progress of an organization.?He is a forward thinker with a growth mindset, and a calculated risk taker who can mitigate risks and capitalize on opportunities, to navigate business. The blog below will explain how an ERP software can assist a CFO in delivering what is expected from him.

Overview

Before talking about an ERP system, its benefits, let us find out the key jobs of a CFO. CFO nowadays is ??not just a finance guy. His working areas are way beyond financial domains. He must keep a keen eye on business to: (we can show it in infographics –)

In today’s fast-paced business environment, onus of taking the organisation on growth trajectory largely comes upon the CFO.

How can a CFO achieve all of that without losing his mind?

How can he take precise and well thought of decisions based on so many factors?

The answer is simple - by getting a top- down view of enterprise data.

But is it as simple as it sounds? Probably not.

Is there any way to make it simple?

Yes, by plugging an ERP software in the organisation! ?

In this blog we will discuss 8 ways an ERP solution benefits CFO in decision making:?

1.?It breaks data silos- Closing books is a tedious job, not because of the long calculations the process involves, but because of the various departments involved! Dependency on other departments, last minute updates and changes, current status of orders, etc. slow down the process of month-end and year-end closing.

An ERP enables various departments to share real -time data with the whole organisation and thereby ensures flow of single source of truth. That means all the data of an organisation are synchronised, updated real-time, and therefore the data maintains uniformity throughout the organisation. The data of departments are not in silos but shared.?With this shared data, CFO can get a holistic and real picture of the financial status of the company in real-time. Based on this data, CFO can reduce the time to close books.?

2.?Gives visibility - With the help of ERP, the CFO has clear visibility on daily financial performances, cash flow, giving him a fair picture of loses and insights to control it. An insight to real-time bank account makes it possible to forecast liquidity as well as cash-in-hand which leads to better management of finances.?

Such a visibility and insight are very crucial while taking big business decisions in rapidly changing business environment.

3.?Fosters automation – Accounting personnel do various repetitive works like creating journal entries, reconciling accounts statement, etc. ??By automating redundant works, a CFO can save huge time of his personnel. Also, automation eliminates chances of errors caused due to human interference. ?By taking error free data and saved time of accounts personnels, CFO can utilize account personnels in more useful and important areas such as reviewing transaction details, analysing trends etc. These inputs can help CFOs to forecast, plan and execute strategies.

4. Makes contract management easy- Businesses generally have contracts with suppliers and customers. The finance team does not review these contracts until end of the term and then to revive the contract mails are shot, phone calls are made leading to chaos and panic. By injecting ERP in the system, CFO can manage these contracts easily and reminders can be sent in time, avoiding last hour rush.

5. Handles depreciation of fixed assets- Fixed assets are generally at remote locations. The facility of the location has data which is generally in spreadsheet. For accounts department to consolidate this data, it requires various asset registries which are generally out of date or incomplete. Thus, calculation of depreciation becomes tough. This makes the asset calculation of the organisation a nightmare for CFO.

An ERP can manage fixed- asset data and automate depreciation calculations, using a depreciation method scheduled for each asset. This ensures depreciation rules are applied consistently and is calculated without error, giving a fair picture to CFO regarding assets.

6.?Helps managing multiple subsidiaries - For organisations having multiple subsidiaries, collecting, and verifying data is a painful task. The degree of pain increases with multi-country subsidiaries as conversion of currency, sorting out differences in depreciation, revenue recognition and other rules that vary from one country to another also come into picture. ?

With inclusion of ERP into the system, all these processes can be automated and fasten leading to better collaboration. CFOs can have a Bird’s eye view or even micro level down to each subsidiary. Moreover, multicurrency, multi-language, multi-location support ease out the reporting and decision-making. Whereas, conformance with country-specific norms, compliances, and taxes, helps keep the legal issues at bay.

7. Enables reviews and performance check - During the performance evaluation, with various information and KPIs on the fingertips, CFO can measure performance of departments and overall organisation. These performance check can act as planning launchpads for future. Referring the output of these checks, a CFO can find out the glitches in the process and figure out better plan to optimize performance.

8.?Ensures Scalability and agility- Scaling up a business in the same country or globally with new branches involve great deal of financial calculation and decisions. The situation is more complex for CFO if the organisation undergoes M&A (Mergers and Acquisitions). As the business grows, assets, and liabilities of the organisation grow and managing them all together is a challenge.

Modern ERPs are built to grow with your business and in turn fuel the growth.?They allow accommodating new licenses and keep upgrading the product to accommodate new laws, norms, compliances, and standards.

Besides the above advantages, if an organisation adopts web ERP or cloud ERP, it further reduces IT costs of the organisation as the organisation is not required to bear upfront hardware and IT staffing cost. Besides, they get regular updates to pace-up with the changing trends and standards.?

These are some of the ways an ERP solution can benefit CFO of an organisation in decision making.?Where CFO is the key person in taking the organisation on growth trajectory, an ERP solution is a key enabler of growth.

Concluding Words:

With the changing role and the dynamics of the working of a CFO, he cannot just spend an inordinate time doing repetitive tasks. He must sniff out ways to set the direction of the organisation towards growth. He should have plans, and data analysis to backup plans, so that he can formulate strategies and propose them to the CEO and board members. This is possible only when he has an efficient ERP solution like BatchMaster ERP at his disposal. It can improve his decision-making capabilities on a tactical and strategic level.

If you are a CFO of a process manufacturing organisation and want to implement ERP in your organisation to make a better business impact rather than mere financial influence, consider choosing BatchMaster ERP in your endeavour. We assure, you will boast of your decision!