Selecting the Right ERP Accounting Software for Financial Management

In a Nutshell

ERP Accounting software are readily available in the market today but it is important to pick the right one. This article will discuss the factors you need to keep in consideration when choosing an ERP system for your financial organisation and a quick comparison on whether you should get a custom ERP system developed by an expert.

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Table of Contents

Enterprise Resource Planning (ERP) systems have made a significant impact on businesses across various industries. According to a study conducted on LinkedIn, 31% of businesses are employing the help of ERP systems. This is taken a step forward with ERP accounting software.

A survey conducted by BDTask found the highest usage of ERP systems is found in the financial sector with 13.8%, while 53% of financial institutions are considering investment in an ERP accounting software as their top priority.

In this article we will discuss the importance of an ERP system in the financial sector, what to consider when choosing an ERP system and how custom ERP software development can help your business improve efficiency within operations.

ERP and Its Importance In Financial Sector

Before we can look at the factors that impact the choice of an ERP, the first thing to learn is what an ERP is and what it does. In the simplest way possible, ERP systems are a business managment solution that manage the day-to-day business activities within an organisation of any industry. These activities can range from finances, transactions, procurement, supply chain and even compliance with regulations. In other words, ERP is a centralised system that improves the flow of organisational processes.

In today’s world, ERP is seen as a vital part for any organisation that is looking to streamline their processes and eliminate bottlenecks. This is especially important for businesses in the financial industry.

With millions of transactions happening on a daily basis, financial institutions are tasked with staying, compliant, accurate and efficient. When dealing with monetary gain and loss, the slightest instance of human error can sometimes have catastrophic effects. This is why systems such as ERP accounting software are necessary to mitigate the risk of these human errors and improve operations.

Following are the reasons as to why having an ERP system is important in the financial sector:

  • Speed up processes and time needed to generate reports
  • Gain improved accuracy and visibility
  • Streamline consolidation amongst companies
  • Simplify financial operations
  • Gain meaningful insight with centralised data
  • Optimise cash management
  • Integrate with other systems to improve processes

What To Look For In An ERP Accounting Software

There are several ERP systems in the market today, each geared towards specific business mangement solutions, processes or industries. With a large selection, it is often difficult to determine which one will work best for your business.

Following are the factors you need to take into consideration when choosing an ERP accounting software for your financial firm.

Business Requirements

The first aspect to consider is why your business needs an ERP system. The best way to do so is by creating a list of requirements your business needs the ERP system for. This can be done by communicating with different departments of your organisation. You can also opt to create a requirement template which can breakdown your requirements into separate functionalities. This process will allow you to easily determine a choice when getting an ERP system integrated in your business.

Upper Management Support

While this is often overlooked within most organisations, it is paramount that you have the support of your upper management when implementing an ERP system in a financial institution. Before making a choice and implementing the system, you need to ensure that your upper management will support the new system and move on from the existing one. Failure to do this could result in undue issues for the organisation in the long run.

User Support

The next step is to ensure that the people that will be the most hands-on with the system are in support of its implementation. This again requires you to have clear communication with the stakeholders and employees about the use of the system and offer them substantial training about the system once it is implemented.

Functional Requirements

An ERP system can be extensive and there may be modules or functionalities that are irrelevant to your requirements. Before making a choice, it is essential to audit the functionalities each ERP system offers and if they are in line with your requirements.

Integration With Existing System

Businesses in the financial industry have data stored for a long time. Creating the same data store from scratch is a hassle which is why it is important, especially in the finance sector, to choose an ERP accounting system that can be integrated within the existing system. This will help your organisation stay up-to-speed without having to experience downtime.

Budget and Resources

You need to consider the budget you are allocating for the ERP system. ERP systems can greatly vary based on requirements, and it is important to have a clear budget before selecting. You will also need to consider the resources that will be using this system and the training they will need to be provided.

Scalability

As every business would, you want your organisation to grow. Keeping that in mind, you need a system that is futureproof and offer scalability in the future. With technology expanding on a daily basis, you need to get a system that will cater to your needs in the long-run.

Consider Other Costs

Selecting and implementing an ERP system is not as simple as making a one-time payment. There are several costs associated with its implementation. These can range from training costs, additional labour costs, consultation costs, network upgrade costs and more. Before making the purchase, it is important to be aware of all these costs and how it will impact your organisation.

Evaluate Your Options

Once all the pre-planning is done, you can start auditing the different options available in the market and evaluate your options based on your requirements and constraints. This needs to be a meticulous process as ERP accounting software implementation is not feasible repeatedly.

Necessary Customisation

It is rare to find an ERP system in the market that is perfectly suited to your needs and requirements. Often times you will need to customise or tweak the system in a way that it is more in line with your needs. Minor customisation should always be kept in consideration.

Are Custom ERP Systems Better Than Off-The-Shelf Systems?

There is an age-old debate on whether it is better to implement an ERP system that already exists in the market or get one customised from scratch. While it does depend on your company requirements, here is a comparison that discusses the benefits of each type of Enterprise technology solution.

Aspect

Custom ERP Accounting System

Off-the-Shelf ERP Accounting System

Customisation

Highly customisable to fit specific business processes

Limited customisation options

Implementation Time

Longer implementation time due to customisation

Faster implementation time as it’s pre-built

Initial Cost

Higher initial cost due to development and customisation

Lower initial cost as it’s ready-made

Ongoing Maintenance and Support

Requires ongoing maintenance and support

Vendor provides maintenance and support

Scalability

Scalable to accommodate future growth and changes

Limited scalability, may require upgrades or add-ons

Integration with Existing Systems

Can be seamlessly integrated with existing systems

Integration may be complex and require additional work

Training and User Adoption

Requires training and may have a learning curve

Generally user-friendly with minimal training required

Compliance and Regulatory

Can be tailored to meet specific compliance requirements

Compliance features are standardised

Updates and Upgrades

Updates and upgrades can be customised and controlled

Updates and upgrades are managed by the vendor

Vendor Lock-in

No vendor lock-in, full control over the system

Vendor lock-in, dependence on vendor for updates

Conclusion

An ERP accounting system can make all the difference within your organisation when it comes to enhanced efficiency. That being said, selecting an ERP system is a vital task that need to be properly conducted.

If you are struggling to find an ERP system in the market that is tailored to your specific business needs, partner with FuturByte and get a custom ERP system made as per your requirements. FuturByte offers cloud application development services, and DevOps managed service providers. Contact us today for a free consultation.

Frequently Asked Questions:

What are the costs associated with implementing ERP accounting software?

The cost of ERP accounting software can vary depending on factors such as the vendor, the number of users, the scope of functionality, customisation requirements, implementation services, training, and ongoing support. Organisations should consider both upfront costs and long-term expenses when evaluating ERP solutions.

What ongoing support is available for ERP accounting software users?

ERP vendors typically provide ongoing support services, including technical assistance, software updates, training resources, and access to user communities or forums. Some vendors offer different support tiers or service-level agreements (SLAs) based on the needs of the organization.

How does ERP accounting software differ from traditional accounting software?

ERP accounting software offers a broader range of functionalities beyond basic accounting, such as inventory management, supply chain management, customer relationship management (CRM), human resources (HR) management, and more. It provides a unified platform for managing multiple business processes.

What is ERP accounting software?

ERP accounting software is a comprehensive solution that integrates various financial management functions within an organization, including accounts payable, accounts receivable, general ledger, payroll, and financial reporting, into a single system.

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