The 3 critical best practices for ERP systems

Posted by Matt Lewis

One of the best ways to increase your profits - is by leveraging your technology. The best way to make room for sustainable growth is to implement a financial reporting system that will support your company by implementing three critical best-practices.

It has become necessary to accomplish smoother process flow while applying a mandatory level of standardization through application of a consolidated ERP system.  Doing this makes it much easier to manage and automate labor-intensive processes like regulatory filings, account reconciliations, expense reporting, or internal controls management.

​The three most important steps to take when it comes to increasing the efficiency of your financial reporting system are these: 

1. Consolidation of all disparate and redundant systems 

Your financial information will flow more quickly and with higher levels of standardization anytime you utilize a consolidated ERP system.

2. Automate manual and spreadsheet-based processes

Manage and automate labor-intensive processes in order to slash time and cut labor costs. This includes all repeated processes such as expense reporting or account reconciliations. ​

3. Modernize Systems Integration

Your accounting system is a mission-critical transaction hub. Get your data to flow efficiently in order to better support all of your companies performance measures. This helps with making critical business decisions.   Today it is possible to get one clean electronic package. One that can handle all of your:

• Inventory management
• Human resources
• Accounting
• Growth

This combination of benefits makes it possible for you to expand your business and your profitability without having to add staff members.   You can easily see just how much labor you can save if all your business decisions were being made through effective utilization of real-time - easily tracked and managed - data.

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Recent surveys

According to a survey recently released by the Wall Street Journal, 73 percent of all businesses have reported being dissatisfied with their current ERP system.

Even when due-diligence was used, the selection may have cost thousands of dollars for the company in terms of time and resources.   According to the Standish Group, 45 percent of companies with annual revenue margins under 200 million consider their projects to be "challenged." Around 20 percent of these end up being cancelled. Some of the reasons include:

• A lack of commitment
• Lack of resources
• An unrealistic time frame
• Unrealistic expectations

Managers often wish they had a better ERP solution. The internal culture of the organization often resists this level of upgrade and change is often difficult to implement.
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Executives who are dissatisfied with current systems or products are at a critical impasse, facing a choice of one of four options:

1. Do nothing. This means living with the pain and challenge of a poorly working system - or in some cases - no system at all.
2. Hire more people - instead of designing new systems that work (better known as throwing people at the problem)
3. Putting a "we can muddle through one more time" band-aid on the problem.
4. Invest in a robust, well integrated ERP solution. One that has been shown to improve across-the-board business performance.

When we talk about best practices, it shouldn't be a parroted term used to describe what you wish could be done. Every financial reporting system can meet every conceivable need if they approach them using the highest-quality ERP system available today.

Careful analysis of your processes, including an investigation into where employees are engaging in duplicate or inefficient processes, will allow you to decide if it might be time to consider integrated solutions.
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Position your firm for growth. Abandon software meant for smaller, simpler organizations.
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