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How Can a Small Business Benefit from ERP?

How Can a Small Business Benefit from ERP?

Some people believe that Enterprise Resource Planning (ERP) is only for big companies, but that isn’t true. Instead, small organizations can enjoy many ERP benefits highlighted below. 

ERP Overview

Before we delve into ERPs, many benefits, let’s learn more about the backbone of so many organizations worldwide. 

ERP is a vital tool to manage production, inventory, and order processing, and it monitors organizational resources from a single database complete with business analytics and an administrative dashboard. 

ERP can help companies of all sizes bill, collect, and report every financial transaction and manage all critical financial information. It also enhances effectiveness and efficiency with financial reporting. 

Some of the industries that benefit from ERP solutions every day include: 

  • Human resources
  • Inventory management
  • Procurement
  • Project management
  • Supply chain management 
  • Reporting and analytics
  • Financial management 

In the past, smaller organizations didn’t have the money or IT support to devise the infrastructure to implement ERP. But recent technological advances make ERP possible for smaller companies. 

Now, let’s delve into how small companies can benefit from ERP: 

Eliminate Complexity

It’s common for small organizations to have different information systems in every department. Unfortunately, this can lead to many inefficiencies that waste workers’ time as they repeat tasks already done in other departments. 

Instead, a customized ERP solution ensures that relevant information and data are shared across every department. This reduces the need to export or reenter data, decreasing errors, higher productivity, and lower HR expenses. 

Enhanced Data Access

Controlling data access in a small company can be challenging; how many small businesses ‘control’ their user access with passwords scribbled on Sticky Notes? 

With ERP, your company can control access with advanced access control and user management tools. For example, adding or deleting user access for a particular worker has never been easier!

Better Information Flow

ERP can help small companies integrate their information flow between various organizational processes. 

For example, it can immediately post important business transactions to a firm’s general ledger and many other financial systems simultaneously. Unfortunately, doing this without ERP usually means repeating data and entry and IT processes, which wastes time. 

Higher Productivity

Critical data and information for every department are available on one platform—no need to communicate with workers in various departments and sort through spreadsheets to find essential details anymore. 

A customized ERP system keeps master lists for customers, vendors, materials, products, and other vital data. This helps the organization to stay consistent in its work processes and time management. 

Lower Operating Costs

Small companies want to increase sales, but using spreadsheets to track critical information when business is booming can lead to disorganization that slows growth. 

These companies may have used inexpensive tools such as Peachtree or QuickBooks, acceptable for very small businesses. But when the organization has more transactions and complicated business processes, an ERP system is needed. 

After ERP is implemented, small companies will see fewer lost orders, missed invoicing and shipments, and missed shipments. 

With data streamlined into an ERP system, small organizations can increase growth with fewer organizational problems. 

Improved Business Decisions

Making the right business decisions requires the correct information and accurate data delivered quickly. With ERP, management gets this data and information in real-time to make critical choices essential for growth. 

For example, executives can review data in the ERP system to check total sales and revenues for various months, which helps forecast product sales for the next quarter. 

Implementing ERP is more costly than using spreadsheets, but small businesses can better manage their data and helps managers to grow the organization and plan for the long term. 

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