Enterprise Resource Planning (ERP) is a methodology that allows businesses to allocate their existing resources better and plan to acquire resources to meet demands. In the past, ERP systems were wired into every aspect of a company, from inventory to invoicing. They would automatically update users when they should make orders to keep their systems supplied and their processes optimal. However, as anyone who has ever used an ERP will tell you, they’re rarely this streamlined. In many cases, updating the ERP falls to the personnel on the ground and usually given the lowest priority. Automatic updating does happen with some ERP systems, but occasionally they introduce problems rather than solving them.
When the cloud entered the picture, it was seen as a way to ensure that systems remained connected and accessible. The most obvious application would be to move the company’s ERP onto the cloud. Cloud ERP, as NetSuite tells us, is an ERP system that runs on a vendor’s platform and offers its processes as a service to subscribers . Software-as-a-Service (SAAS) is not a new development in enterprises, but in this case, it offers a unique benefit for specific departments. Accounting is one of those departments that stands to benefit from implementing a cloud ERP system.
What Does ERP Accounting Software Do?
Accounting deals primarily with the flow of resources and ensures that the business can continue functioning given its current asset base. Typically, accounting software takes inputs from the company in the form of invoices. It generates an overall idea of how the business’s assets are performing and what it might need to improve its efficiency. As a business grows, accounting becomes even more complex, and the number of inputs increases. Each sale or acquisition impacts the company’s available assets and its potential return on investment. Modern accounting software has to take these factors under consideration.
Cloud ERP systems link everything together under a single overarching software system. For a business, the benefits are significant:
- Automated processing means less time wasted rechecking figures since they’re automatically forwarded to the accounting system. There’s no chance of human error either.
- Payments can be sent and received under a single cloud software instance, keeping things simple for the accounting staff.
- Cashflow is a lot easier to manage when the business has an overarching idea of where its income is being spent.
There’s also a robust analytics engine in most cloud ERP systems, something that doesn’t exist in non-cloud systems. As Entrepreneur notes, cloud analytics has become such a significant component in business applications because of the sheer volume of data that it can process. Each transaction that happens through a cloud ERP accounting suite is recorded, giving the analytics engine access to the business’s spending data. By leveraging this data, the company can acquire insights into how they’re spending and make their expenditure more efficient.
Is it Difficult to Implement a Cloud ERP Accounting Solution?
If you’re familiar with on-premise ERP solutions, you’d quickly realize that it would be infeasible for a small business to afford a luxury like this. The cloud has made it much more affordable for small businesses to implement an ERP by removing much of the overhead cost. Instead of paying for data banks and servers to process the data, SaaS systems offer their clients a chance to use an instance of their software to manage data through a cloud platform. The cloud platform is secure, easily accessible, and comes with built-in data safety. The business’s data is also accessible to those with credentials from anywhere globally, making it an ideal solution for companies looking to let their employees work remotely. Instead of tens of thousands of dollars for an on-premise ERP solution, a cloud ERP comes up to less than ten thousand dollars a month per subscription.
Cloud ERP and Accounting Creates A More Efficient Workflow
ERP software is supposed to give a business insight into its assets, but it’s mostly a reactionary system. On-premise ERPs typically lack analytical capabilities to inform the business how they could improve their processes and spending. Cloud ERPs alongside accounting SaaS can offer a different vantage point to management and help them figure out where their operations can be made more efficient. If you’re interested in exploring an accounting SaaS with a cloud ERP solution, check out Arista Consulting today, and let’s advise you on the best way forward.