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 a business grows, handling volume, 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 and at the deployment level, e.g. the underlying cloud based technology infrastructure service.
Simply put, if an ERP system does not meet and SMB’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 today the best viable solution. Options vary, but a focus on flexibility and security is a wise approach, assuming the SMB desires to profitably grow.
Small and midsize business finance solutions
ERP adoption usually starts with financial solutions. 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 (AP) and accounts receivable (AR) 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.
Known as the procure-to-pay (P2) or source-to-settle (S2S) process, AP involves ordering goods or services from a supplier, receipt, invoice processing, and payment. General ledger (GL) is the backbone of the accounting system and is a solid base.
Payroll is another commonly used accounting application, but not as widely as the others since SMBs typically outsource payroll to a third-party provider.
Administrative and functional applications
In addition to common financial applications, SMBs should expect basic administrative and functional applications in their ERP system.
Basic workforce scheduling for production and service needs incorporates the labor utilization and capacity to determine the number of resources needed to support the requirements. Some level of skill and availability are likely to be incorporated but it may depend on the complexity of the processes. 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.
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 operating control processes
Beyond basic financial accounting and administrative applications, there are many other fundamental capabilities related to controls, processes, visibility, and integration that Leaders are more likely to adopt.
Since most SMBs indicate that their overarching goal is to grow profitably, cost control is essential. It is impossible to bid or quote business confidently and know what costs are involved.
With cloud-based ERP SMBs gain an integrated business system to provide 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, 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 the faster flow of information between and across departments, and improved efficiency.