Can ERP really close the books faster, and which ERP should an organisation choose?

An ERP (Enterprise Resource Planning) system can help the financial close happen faster and more efficiently — especially if your business is large, has a high volume of financial data, and has to finish on time.

That makes an ERP very important to the close within an organisation. The reasons an ERP helps close the books faster are as follows.

Why ERP helps close the books faster

Centralised data: All financial data is collected in a single system, making it easier and faster to access and analyse. For example, the inventory system links to production and sales — when a sale is made, the data from sales deducts stock from the warehouse, and if the warehouse runs low, it links to purchasing or production to bring in or produce enough goods to meet sales.

Automation: Many accounting processes — such as depreciation calculations and various adjustments — can be done automatically, reducing errors, saving time, and displaying results in real time.

Accurate reports: An ERP can generate various financial reports quickly and accurately, helping executives analyse data and decide in good time, with a high level of detail.

Internal control: An ERP makes internal control more effective, reducing the risk of accounting errors. If data is wrong and gets corrected, you must be able to trace where the erroneous document came from and who handled it.

Choosing the right ERP for a fast close

When choosing the right ERP for a fast close, consider the following factors:

The vendor: Choose a reliable vendor with good after-sales service — base this on reviews from service users or from operators behind the scenes.

Size and nature of the business: Choose an ERP whose functionality matches your business needs, driven mainly by your requirements, so you get an ERP that truly fits the way you work.

Customisability: An ERP should be flexible enough to be tailored to your business processes. During the purchasing phase you should consult the vendor carefully before deciding to adapt the system to your organisation — but the more comprehensive the ERP you choose, the lower the customisation cost.

Ease of use: Users should be able to learn and use the system easily — though by their nature ERPs are more complex than ordinary systems.

Integration capability: An ERP should be able to work with the other systems your business already uses.

Functions an ERP should have for a fast close

Accounting module: Covers every step of the accounting process, from recording financial data to generating financial reports. The accounting module includes accounts receivable, accounts payable, and the general ledger, giving detailed data and efficient operation.

Purchasing module: Helps manage purchase orders and receipts efficiently.

Sales module: Helps manage sales orders and tax invoices.

Inventory module: Helps track inventory and plan production.

Finance module: Helps manage cash flow and financial analysis.

Conclusion

Using an ERP is a good way to make the financial close faster and more efficient. However, choosing the right ERP depends on your business’s needs and size. Understanding the various ERP functions and comparing different vendors will help you decide on the ERP that fits your business best.