ERP Financials Offer Industry Specific Modules
Business Financials Cover Accounting, Treasury and Compliance
May 17, 2009
Though different ERP solutions might differ in their focus and specific routines, almost all of them offer best-practice and industry specific financial and related processes. The modules might be called by different names, but serve certain basic functions. They also offer the facility to work with multiple currencies and reporting standards.
ERP Software for Accounting, Finance and Compliance
ERP typically offers robust modules that can handle all the traditional functions of the finance department. Additionally, they include high value functions that cannot easily be handled by standard business accounting software.
The financial modules offered by a reputed ERP package include:
- Asset Lifecycle Management: It is a business' assets that enable it to carry on its operations effectively and efficiently. In addition to accounting for the assets, ERP modules track procurement, maintenance, operations and logistics, for example. The modules monitor the business assets throughout their useful life.
- Cash & Treasury Management: In addition to managing cash position by managing collections and payments efficiently, modern treasury management functions include managing investments and financial risks. ERP treasury management modules aim at minimizing the cost of finance and maximizing returns on surplus cash.
- Financial Control & Reporting: In addition to reporting on the management of receivables and payables, this module generates reports on financial performance of each of the company's units, and also on the most profitable customers, products and channels.
- Compliance: It is typically the responsibility of the finance department to ensure that all government regulations are complied with. With the proliferation and complexity of the regulations, this has become a major exercise requiring both time and expertise. ERP compliance modules simplify this task, and also help ensure that all regulations are complied with.
The above list is only illustrative. This particular package has other modules like Credit-to-Cash, Procure-to-Pay, Lease & Finance Management and Travel & Expense Management. ERP applications thus do much more than traditional accounting packages, which were mainly confined to scorekeeping and budgetary control, with a few analytic reports
Interfaces with Different Functions and Country Specific Practices
Enterprise Resource Planning packages typically have independent modules for Supply Chain Management, Customer Relationship Management and Manufacturing and Retail Management, among others. A business is an integrated whole, and transactions in all these areas affect financials. ERP financials come with the facility of interfacing with these modules, accepting data from, and providing data to, these other modules. This integration is possible even if different modules come from different suppliers.
Another problem for companies that operate in different countries is the need to comply with country-specific financial reporting requirements, and work different currencies. ERP financials typically come equipped with the needed facilities to attend to these. The facilities also include tools for managing exchange risks.
Modern ERP financials, i.e. modules that help businesses attend to traditional functions like accounting, liquidity management, short-term investment of surplus cash, financing business operations and compliance with government regulations, come with much more. They help to implement industry specific best practices in these areas, and work robustly with far more data than was possible with traditional accounting packages. The ERP modules also help risk management, compliance with the increasing volume of government regulations and interfacing with other modules like supply chain and customer relations management.
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