ERP Specific Benefits

The inclusion of ERP in the Financial Area gives support to decision making since it guarantees reliability and total security on the accounting information. It shows a real and updated outlook of the enterprise.

Another advantage provided by ERP is the great operational flexibility and the fact that it is a very useful tool for multinational companies and corporate bodies since it permits them to execute the fiscal closing. Likewise, it is has another outstanding feature which is to make easier the work of external and internal audits, and gives the flexibility to do research on historical information.

The benefits of an intelligent financial management are the result of a net of independent connections that join a wide range of activities of the enterprise in its daily operation, and a huge range of interlocutors of the financial department.

To achieve integrated business processes, it is necessary to have open access and interconnect the different financial functions: accounting, treasury, management of payments to providers and management of the client’s credit. This does not only involve an improvement in productivity through the automation of the manual treatments, which can be tedious and expensive. The main objective is to open unifying tracks so that the data and real work can flow easily and safely from one compartment to another.

An efficient solution for the financial chain of value management should include the data of the banks, of the financial markets, branches of the company, providers, clients, electronic marketplaces and, investment managers. While this should be done through a simple net, it is useful to reach the whole range of activities of the enterprise at the operational level and at the financial flow level.

One of the most sophisticated and expensive systems is ERP, which goes ahead of the accounting and integrates different departments. An efficient system of financial management becomes the initial point of all the financial information that circulates around the enterprise. It joins and consolidates the information and distributes it to the users that may need it. This means that it not only compiles comprehensive information and delivers it, but also directs the information in the adequate format to the right person that needs that information in a precise moment to perform a task.

ERP also offers better access and more safety. All the components of the financial department will be able to access the chain of flow management. However, each person will only have access to a limited number of functions and will see the details and tasks that are previously authorized for him. On the other hand, the financial director as the main administrator can manage a huge number of processes, and can use the opportunities of communication. An example would to generate reports that could help to justify the results and find a better way to manage the funds.

Another area where the new technologies could improve the management of the funds is the quick cashing of accounts to charge. The result is evident: it charges before, and the DSO and credit risk decreases. The fund investment of the enterprise accounts to charge is minor. Besides, the demanded assets closes before liberating the credit line for posterior sales or additional income.

Advantages

The need to use the communication and workflow to connect to the external financial world situation is especially explicit for the management of the financial risk. The inclusion of the financial management systems for the international accounting rules, and the reporting associated to the same turns ERP into a powerful tool in the communications net. Despite the operations of loans, investments and coverage as classic activities of the financial department, it is also the link in real time with the internal and external systems of the financial market, and it could also be useful for the departments in charge of selling or purchasing merchandise.

Another area where the financial directors could see better benefits is on the management of funds due to the global systems management, as in the multilateral netting. The evolved communication allows the administrator in the centre of netting to visualize all the transactions between the branches and the headquarters of a group.

The financial teams of the enterprises have better reasons to avoid the agreements that could put them at the mercy of a financial entity in particular. The technology has provided them with the key that allows them to cut the ties.

Due to increasing sophistication, interoperation and connectivity, the system can support the creation of a notional bank that can reflex with a considerable precision in running a real bank, complete with the generation of banking statements and liquidations with a detail and professional presentation, in case the enterprise wants that option.

The companies without an intern bank could actually find it profitable to organize one, and the enterprises with an internal bank already running could realize could improve it. In conclusion, the new technologies offer the financial management a sight in real time and an improvement of the management of financial flow through communication systems that satisfy the real needs, which allows for the reduction of funds and therefore, the reduction of costs.

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