How Enterprise Resource Planning (ERP) can Help the Accounting Department

An Enterprise Resource Planning (ERP) system is your operational and financial backbone and stretches to all areas of your business. Any ERP system must support, not constrict your ability to execute business strategies that will make your company more successful and establish it as an industry leader.

Traditional, standalone financial systems only automate a single business function and not an entire cross-functional business process; they demand manual, labour-intensive processes, such as re-keying data into separate systems. Legacy systems are also inflexible as they don't allow organisations to alter their business processes to adapt to changing business needs nor do they provide visibility across the organisation - let alone across the extended supply chain.

If your finance organisation is dealing with any of the issues listed, then an ERP system can help:

• Do you need financial transparency across all of your business units or is your organization still using spreadsheets to manage its financial health?

• Are you planning on adding new businesses by growth or acquisition?

• Are your processes manual or require large amounts of manual intervention for complex or repetitive transactions?

• Are you subject to generally accepted accounting principles (GAAP), International Financial Reporting Standards (IFRS), Sarbanes-Oxley, or any other national or international financial oversight?

Support for the Global Enterprise

Corporate expansion and growth inevitably leads to new markets and new countries. An ERP system should have multi-country and language management capabilities that can manage your business wherever you are in the world with support for country-specific requirements.

For example, an organisation that has its headquarters in one country can arrange applications in the native language for that country. When a satellite office in another country needs to add users that understand another language, the only change for these users is the language. All corporate processes that the headquarters have organised are unchanged and no local language customisations are required at either location.

This multi-country functionality surrounds not just having the applications screens appear in the localized language. A modern ERP system will include a financial management application that is both global in its deployment AND local in its configurability to meet local financial and tax regulatory requirements. 

Transparency and Visibility through Enterprise Performance Management

First and foremost, an enterprise needs to have a finger on the financial pulse of the company, and as the pace of business continues to accelerate, you must move rapidly with precision and agility, reducing reaction time and optimizing financial performance. You can't afford to miss an opportunity or delay a necessary course adjustment. That means that everyone in your enterprise who impacts the financial results must know how the business is performing on a daily basis. In a global business environment, forward-thinking and planning is vital. Critical financial metrics can't be permitted to get lost in the information morass.

Enterprise Performance Management (EPM) solutions offer end-to-end capabilities that remove the barriers to better business insight through a combination of intuitive user experiences, user driven key performance indicators (KPI), and prepackaged analytics that have real meaning to the business.

Today's enterprise-level financial systems should also come standard with embedded executive dashboards and graphical KPIs designed to give executives and line of business managers alike the strategic financial data required to make critical short- and long-term decisions. Strategic use of these resources allows you to manage your company by exception, as opposed to micromanaging the increasing number of financial variables and demands being placed on your company. Some examples of standard financial dashboards and KPIs that you should include in your evaluation of vendors include calculation of days sales outstanding (DSO) and days payable outstanding (DPO) to determine your organization's cash flow position, supplier performance metrics, sales order backlog and scheduled shipments, and so on.

Integrated Governance, Risk, and Compliance (GRC)

With the increasing nature of worldwide compliance regulations, the need for corporate financial visibility has become necessary for any size organization. Combining the disparate data sources internally and reconciling between the individual departments is a huge undertaking. While departmental spreadsheets and legacy data systems may be providing an adequate financial management solution today, as the need for centralized financial data and financial visibility increases, spreadsheets and home-grown systems will no longer be a viable solution to run a business.

Achieving financial visibility and effective controls within the enterprise can be a formidable challenge when many of the processes and procedures in place remain manual and fragmented. Effective governance, risk and compliance (GRC) initiatives help companies and their employees stay compliant, and ensure that employees at all levels of the organization are aware of the associated risks of non-compliance. Expectations are rising among auditors, regulatory bodies, customers, and other stakeholders regarding the protection of corporate information against piracy, fraud, and sabotage concerns. ERP systems control the majority of the information that could potentially be at risk.

Next-generation ERP delivers GRC functionality through a combination of embedded capabilities, modules and related services. Compliance is at the heart of the applications and is consistent with published international standards and best practices. These include published standards in corporate and financial governance such as IFRS and GAAP while also incorporating support for international trade standards such as restriction of the use of certain hazardous substances in electrical and electronic equipment (RoHS), Waste Electrical and Electronic Equipment (WEEE) directive, and the North American Free Trade Agreement (NAFTA).

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