ERP in finance: The advantages of ERP for the financial sector

Financial operations play a significant role in all businesses and if you are looking for ways to take better care of finances for your business, then, this article is for you.

When the business fails to know everything it ought to know about its finances, it’s almost the beginning of many problems it's about to face.?These include financial errors, blocking of cash flow, little or no capital available for business expansion, and much more.

Most often just a qualified professional is not enough to get you out of this situation.?What you need is also a tool that helps in this process ensuring much security for your business.

This is where ERP comes into the picture. ERPs, such as Oracle NetSuite ERP, is a great ally to take better care of your company's finance department and ensure business growth. Want to know how? Just keep reading this article.

What is Financial ERP?

Financial ERP is a business management system that helps you precisely plan your organization's resources and take control of income and expenses.?Which means assisting you with tasks such as managing inventory, sales, commissions, tracking codes, etc. The software involves building a complete database that organizes virtually all of the company's financial information. This software is available both on-premises or cloud-based.?Cloud-based ERPs like NetSuite can integrate not only financial operations but also logistics, manufacturing, human resources, and so on. The primary purpose of an online management system such as this is to help managers manage the business. The process becomes more agile and more accessible as it allows real-time monitoring of all financial transactions.

Key features of ERP in the financial module

General Ledger

The ERP software digitally records GL, which primarily is data of all company financial transactions, including revenue, costs, capital value, and assets. Easy access to this at any time and anywhere provides financial managers with sufficient financial data to analyze and make reports without waiting for data from other departments. Furthermore, it can be integrated with various activities and procedures like procurement, purchasing, cash flow management.

Account Payables

With a custom ERP system, you will be able to register all new invoices quickly. You can track current supplier bills and authorize all the incoming invoices while also having a user-friendly form for approving invoices. Besides, this module helps users to automate the invoice production and approval process, depending on the type of the bills.

Account receivables

With the ERP's AR module, you can effectively track the cash flow between you and your customers. It allows you to automate processes, including creating periodic invoices, financial statements, and payment reminders. Furthermore, the AR module enables you to obtain financial analysis and statement reports.

Asset management

One of the essential things that the financial module does is manage fixed assets. With AM module, fixed asset depreciation for the fiscal reports and asset revaluation is super easy. The key functions of the AM are to manage fixed assets, including depreciation, compliance requirements, disposal, fixed asset valuations, and taxation.

Benefits of using the financial management system

Having software that integrates various business sectors makes it much easier to have more effective financial management because you have all the information in real-time, which helps in making the right decisions at the right time.

With ERP, you can have a better view, find investment possibilities, and know when to retreat, in which areas it is possible to optimize production or cut expenses.

Learn about some other advantages that an ERP makes possible to improve your financial management:

Cash flow automation

The cash flow consists of representing all financial inflows and outflows of the company. It is, without any doubt, one of the most critical tasks for the financial area, guaranteeing greater predictability and stability to the sector.

The ERP for financial management allows the cash flow to be automated, that is, it requires less human involvement for its correct execution. The financial area professional is limited to including the information in the system.

The software automatically generates projections, graphs, and reports related to cash control. What's more, it ensures that information is shared with previously authorized people and areas, increasing efficiency in what is done.

Confidence and agility while making decisions

If you get a proposal that you need to decide what to do quickly, it's much easier to have software that brings real-time business information to help you make the best decision.

?With an ERP, this is totally feasible since the tool brings more security when deciding the direction of the business because, through it, you can quickly analyze the data of the sectors and see what the best way to act is.

Accuracy in detecting failures

?Human errors are one of the main internal factors that can compromise a commercial operation, but unfortunately, they have to be considered in your strategic planning, after all, we are all subject to making mistakes.

However, a financial management system allows failures to be detected more accurately, preventing the operation from suffering irreversible damage.

More security in financial operations

Excel spreadsheets or notes in account books can help organize the accounts, but these means, in addition to being outdated, can be easily lost and are more susceptible to errors, which can compromise the company's management.

With an ERP, it is possible to carry out this process with much more security, as the software protects the data, avoiding losses and damages.

Cost reduction

With real projections of how your business is doing, it is possible to analyze in which areas you can eliminate expenses and in which to invest for the business to grow. In addition, by implementing an ERP, several expenses that make up the business budget can be reduced or even eliminated. Examples are expenses with documentation, printing, employee overtime, and many others.

Now that you know how important an ERP is for the financial health of your business, how about starting to analyze the chances of implementing it and making your company grow even more?

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