Introduction
Businesses have multiple operations like Accounting, finance, marketing, sales, purchase, inventory management, supply chain management, human resource management. Traditionally, businesses manage each of its functions through employees. All records were maintained on paper, resulting in a huge pile of files. Searching for any specific information was a time-consuming task. In addition, crucial information was sometimes lost, damaged or distorted over time making record maintenance a significant challenge for businesses. These issues led to operational inefficiency, error & financial loss.
Recognizing these challenges, IT companies identified an opportunity in the market and they developed ERP systems. ERP solution is designed to address the problems such as unorganised data, human error, duplicacy of records, loss or distortion of critical business financial or other data, operational inefficiency etc.
ERP System enabled seamless sharing of information across departments and made the business operation more streamlined, faster & efficient by centralizing data from multiple operations onto a single platform. As a result, business data from any period could be retrieved within seconds, resulting in prompt decisions-making and improving operation efficiency.
What is an ERP? A brief introduction to ERP.
ERP (Enterprise Resource Planning) is a software system that enables businesses to manage, integrate and automate their core accounting and financial operations by eliminating human error, data duplicacy, delay in decision-making and business inefficiencies. ERP software also supports other business functions like Inventory Management, Taxation, Purchase Management , Cost Management, Human Resource Management etc.
Today’s ERP system integrates a wide range of functions but its foundation lies in Accounting and Finance from where ERP originated and as business needs evolved new modules were gradually added making it a comprehensive business management software.
KEY ERP MODULES
Following are the key ERP system modules meant to streamline different business functions:
Accounting and Finance
This module automates and digitizes Accounting and Financial functions such as book-keeping, accounting, taxation, budgeting, reporting etc. It begins with the recording of day-to-day financial transactions and automatically preparing and generating ledgers and financial reports such as trail balance, balance sheet, cash flow statements, Profit & Loss statements based on these financial transactions.
ERP transforms these raw data into meaningful insights which enables businesses to make informed decisions, monitor business performance & ensures compliances.
Inventory Management
This ERP module maintains the digital record of business inventory and stock level. This module helps businesses identify situations like understocking, dead stock, overstocking beforehand ensuring better inventory control & planning.
The ERP system monitors the inventory level in real time & when it recognizes the need of placing a new order (i.e. when stock level reaches danger zone), it alerts the concerned personnel and suggests placing a new order to avoid a situation of stock shortage to prevent lost sales opportunities and protect their reputation by timely delivering product by maintaining minimum stock level throughout the period.
It also eliminates situations like overstocking to save inventory holding and storage cost and optimizes storage space.
Cost Management
This module helps businesses monitor and control production and operational cost by analyzing labour, material and overhead cost. It generates a cost comparison report between budgeted/standard cost and actual cost based on which businesses can identify cost variance and take corrective measures to control cost. This module helps businesses optimize production cost by sending alerts to concerned personnel when the actual cost exceeds the predefined cost limit.
This module is mostly used by manufacturing businesses , contract-based businesses or large enterprises.
Human Resource Management
This module manages employees attendance and leave records , monitors employee’s performance, process payroll, ensures statutory compliances like PF, EPS and other labour law requirements. It automatically calculates each employee's salary, deductions, and tax liabilities based on their attendance, compensation structure, and performance and generates employee pay slips and maintains comprehensive employee records across multiple years that enables management to streamline human resource operations.
Sales Management
This module helps to digitize and manage the records of customer information and sales transactions at one place. The ERP system auto generates sales ledger, sales return and individual customer ledgers. It generates and sends quotations and invoices to customers at one click reducing manual efforts and improves accuracy. It sends payment reminder to customers on the due date to clear their dues on time resulting in timely collection of payments reducing the bad debts and cash crunch. Therefore, it improves cash flow.
Purchase Management
This module helps to digitally store and systematically organise the records of vendors information and purchase transactions at a centralised place. The ERP system auto generates purchase ledger, purchase return ledger and individual vendor ledgers. ERP enables users to generate and send purchase orders to the vendors at one click significantly reducing time & effort required for manually preparing and communicating it. It also sends payment reminders to concerned personnel to make timely payment to avoid any interest charges or penalty, disruptions in supply and therefore, maintaining good relationships with suppliers.
Supply Chain Management
This module helps in managing & controlling the movement of goods from suppliers to the organisation & from organisation to the customers. It tracks the timely delivery of goods to customers by maintaining a minimum stock level throughout the period. The purpose of this module is to monitor and ensure that right goods are timely received from suppliers in the right quantity and delivered to customers at the right time and at the right place.
It ensures smooth flow of goods by real-time tracking of procurement, inventory level and customer order deliveries. This ERP module serves multiple purposes such as minimizing cost of acquisition & inventory handling, improves customer satisfaction through timely and accurate delivery and reducing supply chain disruption. It seamlessly coordinates the procurement, inventory management and sales activities resulting in efficient business operations.
What are the benefits of ERP software?
After thoroughly understanding each module of ERP in the above discussion, it is crystal clear that ERP is a true friend and an invaluable tool for all sorts of businesses. It helps business in multiple ways. Today, ERP has become an integral part of every business as it solves major business problems like data duplicacy, human error, unorganised record of data, poor coordination among departments with respect to data sharing and many more. Below is the list of ERP benefits -
- Automatically generates multiple reports with valuable insight that saves a lot of manual effort & time.
- Enables seamless sharing of data and collaboration among employees across departments.
- Systematically organises business data at a centralized digital repository that could be accessed anytime & anywhere through cloud-based ERP.
- It makes business more efficient by enabling them to make informed decisions using real time accurate data.
- Offer accessibility through mobile and tablet so it is very much handy.
- It improves business productivity and transparency by integrating multiple business functions at one platform,
Which ERP is best for small businesses?
Eduzent ERP (Apexdroid) is best for small businesses as they offer all key modules of ERP at an affordable price. They have a flexible pricing structure. You can buy ERP by paying a lump sum amount or could use their licensing model.They are a renowned ERP software company in Noida with 14+ years experience. They offer customized solutions to meet your specific business needs.
What are alternatives to SAP?
SAP is a costly ERP solution. Therefore, it becomes difficult for businesses to afford them. So, It is advisable to choose ERP solutions of Eduzent Infotech Private Limited, a Noida-based ERP software development company. It is a perfect alternative to SAP.
Conclusion
ERP is not limited to accounting and finance alone but it integrates multiple business functions. Users shall choose the ERP development company carefully when making buying decisions otherwise users will end up buying costly ERP if they don’t know these points. ERP companies shall offer tailored solutions and have flexible pricing structures so that users pay only for the modules they need. Eduzent is one such ERP company in Noida that fulfill theses conditions.
