SMB ERP software solutions
When it comes to why companies are likely to change or upgrade their ERP systems, there are many drivers. Taking advantage of the latest capabilities and functions tops the list.
As business grows for an SMB, handling an increased volume of transactions, accelerated speed of information, and new process requirements may demand adding functionality. Ease of use is key to engaging employees and ranks second on the list. The priority is that the ERP solution must do the job while also being easy and intuitive to use.
Based on their business offering, SMB flexibility should enable profitability and growth—two critical business goals. Flexibility is equally important for the enterprise resource planning solution itself as well as for its deployment.
Simply put, if an ERP system does not meet your company’s current business needs, it’s time to change. Companies in this situation must reconsider their entire IT and systems strategy if they want to successfully pursue their goals. A cloud-based ERP approach—one with a provider that can handle growth and integration support— is the best viable solution. Options vary, but a focus on flexibility and security is a wise approach.
Small and midsize business finance solutions
ERP adoption usually starts with financial solutions. Just like large enterprises, SMBs require a means to track costs against accounts, balance sheet, and P&L generation as well as general ledger functionality. Four of the most common ERP processes that SMBs initially adopt include accounts payable, accounts receivable, general ledger, and payroll. Accounts payable and accounts receivable are two processes SMBs use to connect with customers and suppliers. Accounts receivable covers the order-to-cash process on the customer side (taking orders, delivering a product or service, billing, and collecting payment from the customer). Accounts payable manages transactions with suppliers.
Accounts payable are key to procure-to-pay or source-to-settle process, involves ordering goods or services from a supplier and includes receipt, invoice processing, and payment. General ledger is the backbone of any accounting system.
Other solution areas that are also gaining importance regarding financial management with SMBs include expense management, procurement, inventory and project management.
Administrative and functional applications
In addition to common financial applications, SMBs should expect their ERP system to include basic administrative and functional applications.
Core HR functionality may also be part of some ERP systems; this is another area that SMBs might initially outsource. As they grow, they may look for an HR solution that integrates well into their ERP.
Basic workforce management software allows companies to forecast labor and workload demand; define and assign schedules to meet business objectives; capture time worked, absences, and other labor data; track adherence to schedules and productivity; and adhere to labor laws and pay rules. As labor management and reporting requirements become more complex, leveraging a workforce management or a time and labor solution integrated with the ERP system might be the next step.
In addition, as companies of all sizes compete for talent cloud solutions that not only improve recruiting but enhance the overall employee experience – which contributes to retention – are becoming more important. Together, these employee management solutions increase the need for comprehensive applications that work together across recruiting, on-boarding, career development, payroll and benefits.
Basic operating control processes
Beyond financial accounting and administrative applications, there are many other capabilities related to controls, processes, visibility, and integration that SMBs are more likely to adopt.
While SMBs typically indicate that their overarching goal is to grow, profitably and cost control is still important. as it is impossible to operate confidently without visibility into what costs are involved. At some point, it is not possible for any SMB to survive without understanding and then controlling their costs.
With cloud-based ERP, SMBs can gain an integrated business system that provides a complete and auditable system of record for the organization and establish one version of the truth. Cloud ERP solutions facilitate communication and collaboration by eliminating data silos and disconnected processes. A central repository for performance metrics and KPIs—available on-demand—reinforces this approach. Putting the information in the hands of the right people, based on their roles and responsibilities, also establishes control. Ensuring the right people have access to the information they need is vital, so they can make informed decisions in a timely manner.
As organizations grow and expand, it’s critical to ensure the channels are in place to facilitate the flow of information. ERP solutions integrate different departments (operations, customer service, logistics, sales, and finance). Having tightly integrated departments with a common data model eliminates time wasted on verification and error correction between silos that previously existed. The result is a faster flow of information and improved collaboration between and across departments.