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Is 2021 the year to switch from accounting software to ERP?

The recent budget announcement from Chancellor Rishi Sunak revealed a “Help to Grow” scheme with a digital component that includes the availability of vouchers for eligible SMEs giving 50 per cent of the purchase of “productivity-enhancing” software. These vouchers could be up the value of £5,000 each, quite an incentive to consider for anyone that has outgrown accounting software.

When starting up, business functions are clearly compartmentalised, and accounting software that is not linked to other activities like stocktaking and ordering will be sufficient. However, as a business grows, the need to find software or develop a system where all parts of the business talk to each other behind one dashboard becomes more important.

Once the administration burden becomes too heavy, duplicated information leads to confusion, or mistakes start to happen, it’s time to integrate accounting with supply chain, inventory, HR, and sales processes for greater all-around efficiency and productivity. The answer is already being used by larger businesses and we urge smaller firms to consider a full ERP software deployment.

ERP software works for businesses of any size

No matter the size of a business today, ERP software works. ERP incorporates payroll, accounting, invoicing, banking, and financial reporting functions just like good accounting software packages. However, an ERP software solution will also add project management and supply chain functionality, inventory, warehouse, and logistics management as well as e-commerce management. ERP software adds contact, sales, and customer service management functionality as well as an in-depth HR facility.  A one-stop single software solution, ERP encompasses all business functions, making them all digital, manageable. ERP adds full business oversight, data analysis, and in-depth reporting capabilities for managers.

Small businesses need ERP software

Small businesses must work smarter and leaner to compete with their market peers and with larger more established businesses. ERP removes the guesswork, promotes efficiency, and allows even a small number of employees to quickly work in any area of a business.

Such software is not just for larger companies. It is also cost-effective and highly beneficial for small and medium-sized businesses. In fact, the tiniest business can profit from digitising all its processes in one comprehensive platform that will grow in functionality providing exponentially increasing rewards as the business grows.

ERP solutions use technology to facilitate the flow of information between all business processes and departments. The software allows businesses to manage performance and make informed decisions.

With ERP software an entrepreneur has immediate oversight of all functions and can easily jump from one business process task to another, in the same system. A salesperson in a small company can quickly establish stock levels and have oversight of supply chain issues within an ERP dashboard, without creating additional work for colleagues. And a new employee can be easily integrated into a business and its processes as a company grows. ERP software has a centralised business database usable by all, it automates key business tasks saving time and money. It can also help with critical business elements like regulatory compliance and risk management as well as financial reporting.

Growing businesses benefit from having ERP software from the outset

If you choose ERP software early on for your business, it will be easy to add new employees or users to your ERP platform and introduce them to its functionality as you expand. The data going into your ERP system also grows over time and with it the benefits of analysing that data. As your business builds, you will use more and more of your ERP software’s capabilities, and it will be able to cope and scale with you. In contrast, starting with a small business accounting system will not give you this medium to long term ability to scale.

By using a comprehensive business platform and streamlined business processes employees can focus on the demands of a growing business and perform more effectively. This increases productivity without needing to add more human resource until necessary. Tedious and routine tasks can be automated with ERP systems. This motivates staff to focus on greater business challenges and human interaction such as sales and customer service. In competitive businesses, effective customer service and management, facilitated by ERP systems with CRM functionality, gives a competitive advantage.

Moving from standard accounting systems to self-serve ERP platforms

Often small businesses begin with basic accounting systems, finding after significant growth they need to move to a full ERP software platform. Choosing cost-effective ERP systems from the outset negates the need for implementing new software across all departments later. Choosing ERP early means that later there needs to be less focus on transferring data or training staff on a new system.

Modern ERP systems include accounting functionality suitable for small businesses and are quickly scalable when growth occurs. Though some accounting systems have bolt-on software extensions for when additional functionality is required, they are rarely as seamless to integrate and utilise as today’s very scalable full-service ERP software options.

This said, switching from a standard accounting system to full ERP software is not as daunting as it may appear. A good ERP software provider, with an accessible support team, will always be on-hand to help with data transfer, business integration and the training of new staff.  Businesses can deploy full modern ERP systems quickly and take advantage of their efficiencies immediately.

The benefits of introducing ERP software

Adding ERP software at any point during a business life cycle can immediately deliver better customer relationships, better business oversight, insightful data, and more informed decision making.

ERP software will be particularly beneficial to a business if staff are waylaid with repetitive or paper-based tasks and if customer service and sales processes need to be maximised. ERP software will give you an advantage if you are finding your current stock and e-commerce management systems don’t integrate with the rest of your systems and aren’t readily accessible to all employees, or if your budgeting and forecasting is becoming increasingly difficult to collate.

ERP systems also help to manage regulatory compliance and risk management by giving complete oversight to managers and automating processes and process management. ERP systems provide reminders for employees as well as standard forms, and they can record all important audit-ready compliance data.

ERP systems are easily customizable. A good provider will be able to show you which ERP functionality you need to use immediately and how exactly the system can work to benefit your business. Your software provider can also help you to create your internal processes digitally and add and customize all the forms, fields, and documents you will ever need.

One small business that switched from accounting software to ERP software is Broadbent Industrial Supplies in the UK, a division of PAY Broadbent. The company needed a cost-effective but scalable ERP solution to support its growth. It was finding managing stock with its existing system was time-consuming and placing orders “took ages.” This company was faced with investing in more manpower to cope with ineffective administration processes or choosing to invest in ERP software.  Broadbent believes “people buy off people,” and with better equipped and more productive staff after its ERP implementation, it was able to grow and add two more staff. These new hires were not administrators but instead a salesperson and a driver, both customer-serving roles.

For those not convinced about an investment in ERP software, or worried about the costs, the recent budget announcement from the UK Treasury may change that. UK small businesses will be handed support under a new £520 million Help to Grow scheme, where 130,000 businesses are expected to be eligible to claim up to £5000 each to secure a discount on productivity-enhancing software, quite an incentive to consider a switch to ERP software.

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