Five rapid financial wins of a new ERP

The compelling reasons to update and deploy these systems in the long run
11 July 2022 by
Five rapid financial wins of a new ERP
Smart Information Technologies Limited, Barry Bullen

Regardless of industry, implementing an ERP system can massively benefit your business by streamlining processes, providing full 360-degree visibility which lead to increased profit margins.  

There are some compelling reasons to update and deploy these systems in the long run - they will add significantly to gross margin by the end of their typical investment cycle (ten years).  However, in taking only a long-term view, we can overlook the very important short-term positive impact of early adoption.  There is a real positive financial impact of implementing ERP across the board and the effects can be very swift.

And just to show that adopting these systems actually work we have a great case study here for you about how a leather bag and satchel manufacturing company, Cambridge Satchels made significant improvements in a short period of time.

We are here to help you work smarter, not harder. In doing so, we have identified five areas where these systems make a strong short-term impact:

1. Shorter management cycle: The ability to track sales from first contact to close is to have the best information about your sales cycle. Integrate your email system for better customer relationships through better communication. Create purchase orders and keep vendor invoices for payment, including returns, reporting and analytics, all with mobile functionality.  Software add-ons can be specified for your industry, such as retail.  The insights from reporting allow for better decisions concerning margins, lower stock levels, without "stock outs" including a way to map E-commerce; handy when shipping to different countries. One site for USA customers and one for UK warehouses, for example. Improved delivery systems, including special pricing opportunities, real-time tracking from the warehouse to customer, SKU generation for less "wrong item" shipping.

2. Decreased financial close cycle: There are two aspects to be considered here: internal and external.  With every aspect of the financial portion of your business in one software system, reconciling accounts to close out the books at month/quarter/year end is streamlined. Plus, this is in virtual "real time".  Updates to accounts post across all general ledger entries.  This increase in effect and reduction in time releases your Finance Director to focus on other added-value tasks.  And secondly, there is the decrease in the customer payment cycle - we'll talk about this more in improved cash management but as your business becomes more efficient across the board, you are able to invoice faster and more accurately, which then reduces your debtor days.  It's money in the bank faster, reducing your borrowed capital requirement to a minimum.

3. Improved on-time delivery: With improved communications via software, you know which item is being transferred to your client throughout the entire shipping process. From warehouse to doorstep, this extensive communication system allows you to accurately communicate delivery times to your buyers. No unhappy surprises for you or them.  But what more do you need to ensure your product is created on-time too?  A solution which job costs accurately and manages each manufacturing step.  This builds confidence in your production schedule and - when things do go wrong - allows you to get back on track quickly and efficiently.  These are the lean manufacturing tools you need to succeed.

4. Lower stock levels: Whether your stock consists of raw materials, or finished goods on shelves, you can invest less of your liquid assets in inventory. Your business can become more of a lean manufacturing operation, thanks to the system streamlining your order management. When you need to make a purchase, you can purchase bulk or raw materials when the price is right.

5. Improved cash management: Enterprise Resource Planning systems can handle all forms of banking transactions: cash, cheque, credit card, bank transfer, bill of exchange. These can all be processed in the system. Other ways to manage cash are tracking fixed assets, controlling budgets, or monitoring project costing. With the Odoo accounting side of cash management, the software can signal when to hold future orders from customers with outstanding A/R invoices. 

In summary, why do it now?

There is never a perfect time to commit to disruption. But there is an ideal time to increase margins; that would be today. The sooner these software systems are implemented, the faster you are on your way to working smarter, not harder.  With an improved economy and increases in business volumes occurring, it is time to take that step.  Time to get these five fast financial improvements for your business.

What are my next steps?

Firstly, if you think it would be good for your business to take the step and update or upgrade your system, you should build a list of ERP systems.  We would always recommend that Odoo was in there because we know it will deliver the type of solution you need at a price point that will ensure rapid ROI. One of the features of the Odoo platform is that because it’s modular you can start small with a couple of modules and scale up.  

The key message is that putting things off can actually damage the growth of your business.

Five rapid financial wins of a new ERP
Smart Information Technologies Limited, Barry Bullen 11 July 2022
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