How to Improve your Cash Flow with an ERP system?

This newsletter is going to address the most common concern of so many entrepreneurs, CEOs, CFOs, and Finance Leadership – How to improve cash flow with an ERP system?

The whole business revolves around one thing and that is cash flow. Improving cash flow can improve the health of an organization and therefore the concern is genuine.

Many business owners take ERP software implementations as a budget burden project. They think investing in this project is waste of money. But what they don’t realize is or say what they don’t know is how the software can really help to increase the cash flow in their business.

In this article we will explore several ways how an ERP software helps businesses to improve cash flow, but before that some basics.

Enterprise Resource Planning Software or commonly known as ERP software is a business management software that manages every aspect of your business. From supplier management to production, warehouse movement, to manufacturing, to sales, to invoicing, to picking and packaging, to delivery and customer feedback, the software manages all.

The software automates the processes, shares data from a centralized source, and increases transparency among various departments.

Companies used on-premises ERP software before the cloud-based ERP software became popular. ??Cloud ERP system offers any time anywhere usability and are generally cheaper than on-premises software due to distinct reasons.

There are many ERPsoftware in the market, depending upon the industry/industry-type you belong to. For process manufacturing industry, BatchMaster ERP software is a pioneer name in the market.

How To Improve Cash Flow with an ERP Software:

There are many ways an ERP solution will improve a company’s cash flow:

Controlled inventory –

Unmanaged inventory and wastage cause huge cash flow crunch in a company. An ERP solution provides visibility into inventory to all departments. This real-time visibility allows departments to manage inventory.

For example, a sales manager now need not to call warehouse manager to get updates on available finished goods. He can access the information on his dashboard and make necessary commitment to the client for speedy selling.

ERP software also helps to reduce backorders. The software automatically gives alerts when specific item goes down beyond a certain limit and hence, there is no raw material crunch at the time of production. This catalyses in-time order completion.

ERP also helps to determine best time to restock through purchase and planning reports and watching the trends. It helps to identify the fast-moving items.

By having these data handy, organizations can ease out cash flow without locking much cash.

Faster billing –

With ERP system in place, you don’t have to wait for billing cycle to complete for raising invoice and sending it to the customer. The invoices can be sent to the client as soon as work is done. This can reduce the time span a client takes for payment.

Overdue alerts –

ERP software flashes and lets you to see overdue invoices. Having all the bills and invoices stored at a single location, monitoring overdue is easy. With interactive dashboard of ERP software, the task becomes easier. You have quick access to open invoices, closed invoices, over dues.

Cash flow management –

An ERP software offers consolidated data of costs and accounts. This data gives a fair picture of current cash position and project cash inflow and outflow for future. This analysis and data give organization an upper hand to plan and influence cash flow.

Automated workflows –

An ERP system automates workflows. Hence, it can grow without hiring additional staff for recovery calling. The system automatically sends reminders of payments to customers removing unnecessary pressure on human efforts.

Fewer errors –

An automated ERP system reduces chances of errors in account receivable process. Fewer errors increase chances of quicker payment and lesser billing conflicts.

Conclusion:

ERP software is a tool which can really enhance cash flow in the organization. With so many features an ERP system offers, managing cash flow is not a hard nut to crack.

?For manufacturers, especially for process manufacturers, BatchMaster ERP offers process specific features that further enhances cash flows.

For example, the software offers by-product and co-product management, it allows formula management and more. These features help process manufacturers to increase cash flow on more granular level.

If you are a process manufacturer and looking for ways to increase cashflow through ERP software, contact BatchMaster ERP or write to us on [email protected] a detailed conversation.