Enterprise resource planning systems, or ERP, are one of the most essential tools any business should possess. These are far more than just an IT application - a good ERP solution should give you all the information you need to manage almost every aspect of your business, in one easy-to-handle location.
ERP isn't just an issue for the IT department. Finance teams will rely on these tools for almost everything they do, and if they can't use them effectively, it will cost the business time and money. Outdated, inflexible systems that lack essential functionality needed by today's firms mean employees have to rely on complex, manual processes to manage their activities, which not only takes longer, but can result in errors creeping in and valuable information being overlooked.
These tools are complex applications that impact every part of a business, so IT teams may be unwilling to invest in upgrades unless absolutely necessary. But if your finance department is suffering from any of the issues below, you should be pressing your board and your investor relations director for a more up-to-date solution.
You've only got a basic accounting overview
Today's ERP tools can offer a wide range of valuable information to the finance department - but if you're still dependent on older, legacy systems you'll be missing out on the huge insights this can offer.
A good ERP system should provide professionals with information including real-time receivables and payables data and forecasting models, presented in an easy-to-understand, visual format. If you're still having to rely on paper-based systems or separate spreadsheets that aren't integrated into the rest of the business, this isn’t only slower, but much more wasteful.
Reporting and auditing are poor
Part of this data should be a comprehensive reporting and auditing process that enables a finance team to maintain full visibility of all operations and track what activities are taking place and who is responsible for them.
Teams without these capabilities will find themselves spending much more time chasing down records and dealing with manual and paper-based systems that harm productivity and don’t give a clear picture. In the worst-case scenario, they may be completely unable to determine exactly what’s going on inside their department, or get vital up-to-date info.
Learn more: The Finance Analyst's ERP Audit Checklist
You can't make or receive fast, easy payments
Being able to integrate payments management into an ERP system will also make it much easier to keep full control over your firm's finances, and the benefits can extend far beyond improving efficiency.
For instance, a 2017 report by Ovum noted that because payments are often the primary touch point an enterprise has with consumers, strong integration of ERP and payments data is critical in improving customer experiences and organizational efficiency. This is why more than four out of five firms (81%) believe merging payments into ERP will be good for their company.
It's inflexible and inaccessible
The ability to add new locations and lines of business to an ERP system will be essential if growing firms are to be productive, but if this isn’t quick or easy to achieve with a legacy tool, it can leave finance teams with incomplete or out-of-date information.
Having a system that employees can access anywhere has a range of benefits that are great for the finance team, even if they never have to use this directly. In addition to lower costs, it ensures every individual can enter and view accurate, real-time data wherever they are. With everything from new sales to travel expenses available instantly and in one place, this gives the finance team much better data to take into account in their planning.
You don't have in-built compliance features
Systems that can help you remain compliant with essential regulations such as the Sarbanes-Oxley (SOX) Act will be essential for any finance team. It's important to note the software itself won't automatically make you compliant, but it will greatly streamline your compliance activities, with features such as security, notifications and auditing tools.
Meanwhile, rules such as GDPR will also have to be considered. Finance teams deal with some of the most sensitive personal data a business possesses, and having secure solutions that can be centrally managed will be hugely useful in meeting these requirements.