Manufacturers need better Financial Management systems
Gone are the days when basic accounting packages or spreadsheets sufficed for tracking financial data in manufacturing. Those are entry-level financial solutions that cannot scale as the company grows, nor can they help manage various departments, such as order management, the shop floor, or warehousing and inventory. Manufacturing companies that are growing need to implement an Enterprise resource planning (ERP) system to have a more holistic view of financial management.
Why Financial Management needs an ERP System
ERP offers opportunities for finance to manage transactions better, streamline processes across the enterprise, improve reporting and analytics, and become the basis for finance transformation. This is enabled through the integration of different business applications that an ERP provides.
A financial management system within an ERP enables accounting and financial reporting with financial and accounting controls. Financial data is always up-to-date because of real-time integration between financial, manufacturing, inventory and other business functions.
By using an ERP, financial management has a 360-degree view of the factors that influence a company’s financial health. It helps manufacturers maintain accurate financial records, comply with accounting standards, and make informed financial decisions.
Benefits of ERP for Financial Management
An ERP offers many advantages for financial management.
- Streamlined workflows: By integrating data from all areas of the business, an ERP system can improve workflows and eliminate the need for multiple data entry points.
- Reduced errors: Streamlined workflows combined with automation reduce the source of errors in financial records.
- Human resource efficiency: Optimizing and automating routine financial tasks, such as accounts payable and receivable, and general ledger accounting, frees up staff time for activities like financial analysis.
- Enhanced decision-making: Real-time access to financial data gives managers a clearer picture of financial performance, allowing them to make more informed decisions quicker.
- Cost savings: Improving financial management from the ERP can lead to cost savings in areas like inventory management and the shop floor and assist in making procurement more cost-effective.
- Data consistency: ERP systems ensure that information is centralized, ensuring data consistency and eliminating the discrepancies that arise from using multiple standalone applications.
- Regulatory compliance: An ERP system can help companies comply with financial regulations by providing a centralized repository of financial data and automating reporting. This can also help with governance and tax reporting.
Why an integrated Financial Solution is important
In today’s hyper-competitive landscape, seamless integration isn’t just a perk — it’s a strategic imperative. Manufacturers leveraging ERP systems ensure consistency in cost management frameworks throughout their operations, positioning themselves for sustained growth and ultimately profitability.
Integrating finance with ERP empowers CFOs with information to ensure competitiveness in the future. It enables them to streamline working capital management through better procurement, cash flow and inventory management, undertake comprehensive budgeting, and improve reporting,
Insights from the SYSPRO CFO Survey
In the SYSPRO 2024 CFO Survey, the importance of an integrated financial management system for the modern CFO was highlighted by a number of issues that CFOs are now dealing with.
Beyond crunching numbers, today’s CFOs must have insight into a complex web of operational challenges. They must now know what is happening in all other functions that contribute to meeting overall business objectives.
Today’s CFO wants to build internal resilience rather than worry about external events outside their control. To do this they need technology that supports process and cost efficiency across different business functions to ensure the future success of the organization.
For manufacturers, CFOs need actionable insights into production operations. This requires a fully integrated ERP system so that data from all areas of manufacturing are available to unlock insights at scale.
To achieve greater digital transformation, CFOs are investing in technology that automates and integrates core business processes. This gives them the visibility into the data they need to monitor, assess and analyze all areas of the organization’s performance.
ERP Improves the Efficiency of Financial Management
An ERP that integrates financial management with other business operations enables clear insights into profits and costs, empowering CFOs with better information for strategic decision-making.
In conclusion, as manufacturing landscapes evolve, so too must financial management practices. ERP systems aren’t just tools — they’re catalysts for innovation and growth. By embracing ERP, manufacturers can future-proof their financial strategies, ensuring resilience and competitiveness in a rapidly changing world.
