An ERP system is a software system for automating business processes. It can significantly help your organization do things better. It gives you control and insight into your business processes. At the same time, it helps employees work more efficiently.
But what exactly is ERP software and what are its advantages? Are there things that you should take into account when selecting? And how do you implement the software into your organization? In this article, we will discuss all these questions.
What is an ERP system?
An Enterprise Resource Planning (ERP) system is software that organizations use to support business processes within the company.
ERP systems can be used in almost all types of organizations and in all kinds of sectors. In large and small, and in manufacturing as well as service companies.
ERP software usually consists of a few basic modules that unite and automate all business processes. To these, you can add additional modules. For example modules for inventory, accounting and finance, human resources, sales and marketing, purchasing and customer relationship management.
Why should you use one?
Using an ERP system has many advantages for the whole organization. Thanks to KPI (key performance indicators) analyses, the organization has the right data to optimize all processes. This makes organizations more efficient and flexible.
❯ The analyses, done by the software package, give you the insight needed to optimize production costs.
❯ Tasks become less labour-intensive and collaboration improves.
❯ Productivity then increases, costs are reduced and order processing times are shortened.
❯ Companies often become more customer-focused and thus provide better service.
With an ERP tool, all your company data is stored centrally. Departments and/or business units no longer use separate software packages in which they each store their data; instead, everyone uses the same, main ERP system.
This creates structure and provides you with a systematic overview of all processes and results within the organization.
The benefits for your finance team
The choice of what system best suits your organization is not a simple one. Usually, it’s a strategic decision to start using an ERP system, often proposed by the CFO and the finance team.
This makes sense as it is a source of information that will help you make decisions, develop action plans and ensure further growth of your company.
The decision to work with an ERP system goes hand in hand with growth. A small organization will usually start out using just Excel, simply because there is no budget to purchase and implement a centralized ERP system.
But as the business grows, it becomes increasingly difficult to keep a structured overview of KPIs in Excel. When that situation arises, it may be time to implement an ERP system.
In addition to benefiting the entire organization, the investment in ERP especially helps finance teams. Below we list a few specific examples:
❯ After integration with existing tools and systems, you end up having a single interface for the whole company, giving you a complete overview of your organization. Which is a perfect opportunity to thoroughly (re)structure your company;
❯ You can process large datasets more easily (which can be tricky in Excel). The simple corroboration of your key numbers in the ERP tool will give you a clear picture of your profit margins and consolidated data;
❯ The auditing process and KPI reporting will take considerably less time, making it easier to balance the accounts each month.
How do you select an ERP system?
It is important to do a proper comparison of all ERP tools available on the market. So you don’t take any chances when selecting a supplier and a package. You should therefore map out your organization’s wishes and expectations well in advance.
To set up an ERP system, you need to take into account the following:
1. Your budget: what are you willing to spend? The initial investment can be quite big (between €30,000 and 50,000), with possibly the benefits not outweighing the costs, once the system is implemented. But there might also be cheaper suppliers in the market. So it is important to thoroughly research the options.
Depending on the organizational structure and its preferences and needs, certain ERP modules will not be used. And therefore not purchased. As ERP packages are tailor-made per company, this will affect the final costs.
2. Your time frame: defining your ERP requirements may take a long time because of the many stakeholders involved. Keep in mind that from the moment of selection, it will take an average of two to five months before an ERP system is ‘up and running.
3. The implementation: once all specifications are determined and an ERP tool has been chosen, you will need a project manager. He or she oversees the migration of all data into the ERP system.
To ensure a careful and successful implementation, professional guidance is recommended. And all employees must be well prepared and trained. This will take time and effort, but it will also give you the opportunity to improve work processes in the organization.
Read more about the integration between SimpledCard and your ERP or accounting program.
What software solutions are there?
Nowadays, you will find plenty of ERP-system providers in the market, with solutions suitable for large multinationals as well as for medium-sized or small companies. There are even ERP packages for as few as two users.
Due to the development of ERP solutions in the cloud, the software has become much more accessible. Especially since every organization has its own set of specifications and therefore seeks a tailor-made solution.
Below, we have listed some of the major suppliers, with the main characteristics and advantages of their ERP packages:
❯ AFAS: modern automation software
AFAS offers a one-stop solution for each sector, integrates all administrative processes into one database and promises 100% efficiency. This innovative Dutch family business takes social responsibility seriously and has over 12,000 customers.
Their package offers CRM software, financial administration, HRM & Payroll, order management, and if required, software solutions for procurement, tax, subscription management, document management, personal development management and workflows.
❯ Software in the cloud at Workday
This innovative, American software supplier of cloud-based ERP management offers flexible and scalable solutions with solid customer-support services, to medium to large companies.
Workday provides software solutions for Financial Management, Human Capital Management, Enterprise Planning, Spend Management, Talent Management, Payroll & Workforce Management, Analytics & Reporting, Professional Services Automation, Platform & Product Extensions.
❯ The renowned Exact Online
This Dutch software company was established in 1984 and now has branches in 20 countries. The ERP package integrates financial, logistical, project-related and administrative business processes into one system and is used by more than 9000 accountants.
It can be integrated into 220+ business software programs. Exact Online promises to help you get a grip on your processes, a higher productivity rate and a low risk of errors.
Connect your ERP system with expense software
Once you have successfully implemented the ERP system, you can take it one step further. By integrating the ERP software with SimpledCard, your entire business expense payment and justification process are automated. But how does justification software work in combination with an ERP system?
How do you ensure a streamlined ERP integration?
By using an API (Application Programming Interface), it becomes easy to connect your ERP package to SimpledCard. This ensures a frictionless workflow between your expense management and accounting.
All expenses are settled within the system and can then be uploaded in final form into your own accounting system. For this, a customized system is used that employs your internal account numbers and follows the rules of double-entry bookkeeping.
You may choose standard reports or use customized reports. The custom reports are tailored to specific requirements of the software.
This way, all entries in the books and reports are always up-to-date and the finance team consistently knows where they stand.
What does ERP integration mean in practice?
A company-wide ERP package can lead to many improvements within your organization, such as full insight into your business processes and a decrease in production costs.
In short, an ERP system can be of great help to a company that is growing and increasingly having to deal with complex management tasks. An ERP package structures your financial setup and gives finance teams real-time and accurate business insights. It’s an investment that will save you time in the long run.
So with an ERP package, you will finally get a good grip on your business processes and a clear overview of where your organization stands.
Contact us about ERP integrations
Our specialized team can provide you with integration support and technical advice. Our experts are happy to tell you more about it.
If you have any questions, please contact our team, and they will advise you on what best suits your organization.