Communication and administration can be a big headache in the management of a company, whether it is a large or small enterprise. In particular, managing the information flow with regard to payments can be a challenging task if there are several people or several departments that need access to the same data. They may also need to use it in real time for logistics and business tasks, such as inventory control or accounting. For this reason, enterprise resource planning (ERP) is attracting a lot of attention in business circles.
ERP in brief
In brief, ERP is a system that simplifies and integrates information flow across an organisation. Instead of maintaining separate databases that can easily drift out of synchronisation, ERP utilises a single database with multiple access points. This approach brings a number of aspects to ERP that make it a tempting proposition for many companies of different sizes. For example, a fundamental principle of ERP is that data is maintained in real time, so that it can be monitored, accessed, and updated in a single, central manner. This ensures that everyone in the organisation is working from figures and information that is always up-to-date.
Managing incoming and outgoing payments using ERP
One of the basic items of data for any business is that associated with financial transactions – the essential information of incoming and outgoing payments. These are the fundamentals of any balance sheet and of the success or failure of any commercial enterprise. Any loss of control over this data can result in a failure of control over the business in general; however, with ERP, given that the payment information is maintained centrally, there is less chance of the business processes stalling through a lack of data or through the use of out-of-date information. For example, when a sale is agreed, this can be instantly recorded in the database. This information is then immediately available to everyone who needs it, for delivery, stock control, invoicing, and other functions. Similarly, when a payment is made, this can be instantly recorded so that the information is immediately available for accounting, customer services, and inventory purposes. Whenever data is entered or edited in ERP, the up-to-date information is available for each business process with access to the central database.
Advantages of making payments through ERP
There are obvious advantages to the sort of central data management that ERP brings to an enterprise. The reduction in data redundancy that is entailed by ERP brings greater efficiency to work practices. This reduces the amount of time spent on tasks and decreases the risks associated with working from old data. Business processes can interlock more effectively, with less lead time between, for example, making a payment and updating tax information. It is also invaluable in stock control, as each transaction can be automatically matched to an increase or decrease in inventory levels.
At a management level, the efficiencies gained in this way can lead to lower staffing costs, lower costs involved in holding surplus stock, and greater flexibility in the time available for managers to grow the business rather than tracking down inconsistencies in data.
By Aimee Claire
About the author:
Aimee Claire is an enthusiastic, well-educated freelance writer with big ideas. She is fascinated by modern technology and what it could do for businesses in the future.
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