Many small business owners are confident in their ability to operate without the use of ERP software. They feel they have a pretty good handle on their processes, and are able to get by using a basic accounting software package. But what happens when your business grows?
Of course, growth is a good thing, but it needs to be properly managed. When it happens quickly, or unexpectedly, you might not be prepared to handle:
- Hiring new employees
- Incorporating new business processes
- Demands of increased inventory management
Before you know it, you might find yourself scrambling to keep up. This is where ERP software can help.
Company-wide Integration
When it was just you and a handful of trusted employees handling things, you were probably able to manage all aspects of your business, including:
- Sales
- Inventory
- Accounting
- Marketing
But as companies grow, these functions tend to become departmentalized. This creates logistical complexities that need to be addressed. In particular, communication between these individual sectors needs to be maintained. An ERP system ensures this by storing key business information in a single database.
Not only does ERP software give your team access to the information it needs, it saves time and errors by reducing the need for multiple data entries.
Manage Your Resources More Effectively
Most small business owners have a pretty good idea of what their business is capable of in terms of production and sales. You’ll know many of your customers personally and you’ll have an understanding of what your company resources are for:
- Cash flow
- Materials
- Manpower (i.e. production capacity)
As your business grows, your client base and order volume will increase. It’ll eventually reach a point where you can no longer rely on a gut feeling or a ‘guestimate’ to determine whether you’re meeting customer demand.
ERP software allows you to monitor company resources at all times to ensure you’re fulfilling your commitments by:
- Tracking product inventory
- Identifying customer buying trends
- Pinpointing weak points in your supply chain
Make Informed Business Decisions
The reporting capabilities of simple accounting software packages tend to be quite limited. Most of them offer periodic summaries that are sufficient to meet tax-reporting requirements. They’ll also offer you access to day-to-day processes such as accounts receivable.
The importance of these summaries shouldn’t be overlooked. They can provide a big-picture snapshot of the overall financial state of your company. However, there are times when managers will benefit from having access to them without having to wait for an end-of-month report.
An ERP system—whether it’s cloud ERP or installed software—provides this information in real-time, so you can access it when you need it to make critical business decisions on the spot.
To learn more about the potential of cloud ERP software, read: 6 Benefits of ERP Accounting Software on a Cloud-based System.
Are you a small business owner contemplating making the switch to an ERP software system? Call one of our consultants at Windward Software to discuss whether this is an appropriate system for your business.
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