Now given the investment that goes into ERP, manufacturers are often confuses whether they should go for a standalone accounting software product or opt for full fledged ERP solutions.
Here are few points that will aid you in making correct decision:
Firstly one must understand what is the difference between the two- ERP software and accounting software? ERP or the Enterprise resource software handles an entire range of business functions covering functional areas like accounts, finance, professional services, automation, human resource, pay roll, inventory, supply chain, project management etc. whereas accounting package handles only accounting part of your business functions.
This means ERP covers all most every area of your business. So before deciding whether to go for ERP or to incorporate accounting software in your business just ask yourself few questions:
1. How many contrasting or unlike systems that you will have to manage?: In case you opt for standalone accounting software you will end up using separate software for managing your leads, customers, partners and vendors and another piece of software to keep a track of your stock and yet another one for managing your projects.
So give a thought that you end up having separate point solutions for managing your one organization. And one of the drawback of having multiple systems for your business is IT management becomes a tough job altogether. And to customize these systems, synchronize some solutions so that they feed each other information makes the entire task difficult and complicated.
When front end and back end systems run separately it can cripple the process that are meant to ensure the smooth running of your company. So for smooth running of business and streamlining all the functional points at one single core, it is advisable to go for ERP software.
ERP software integrates all the functional systems of the business to one single data base. This means you have only one system to worry about and your staff has easy access to the data and duplicated effort is minimized.
2. If planning for business growth: In case you are planning for business growth then go for ERP software. Many accounting packages are great for small and medium business but for large enterprises they fail to cope up with the high volume. So in case you opt for accounting package now and when you plan for growth you may outgrow system capabilities and have to upgrade more feature rich ERP solution at later date as most of the ERP software are scalable and modular in design so that you can continue to expand your system in tune to the growth of your company and requirements.
3. Does staff besides your accounting team need access of certain financial data? If your company has system where in each department has their own separate system to work then in such a case only accounts department of your company can access the financial data. But it is beneficial that members of other departments view certain data that is contained within the accounting software. Say for e.g. sales team want the figures of customer’s payment for last order but if synchronized system is not there they have to go to accounts department to get the information. So with ERP all the information is in the same system and thus each and every person of the organization can see it without disturbing other departments. Restrictions can be set so that each employee has access to information that is needed to transpire their work.
4. Easy report on Key performance indicator: If you want to have key performance indicator data for your business then you need to work out on certain important reports and your accounting software though it tables reports and analytical tools it does not pull all the data together from your organization.
With accounting software you will get only financial data and not other data like stock data, invoice report etc. For comparing sales order with invoice report your financials has to be linked with CRM software and ERP software provides robust reporting tools such and search capabilities as it incorporates all key business data from across the business. With right access one can track any data from any department at one center point and thus reports on key aspects can be created.
For any type query related to ERP please visit http://www.knowiterp.com or call 09811119075
Goods and Service Tax has finally approved in Indian economy (awaited to Welcome). After much ifs and but, the Government of India has finally waved green flag to the GST, which is supposed to hit your business from the next financial year supposedly from July 1st 2017.
GST is an indirect tax reform that aims to remove barriers between states and create a single market.
In other words there will be uniform tax rate between states. As per current taxation system the constitution divides taxation power between centre and the states. Both the levels of the government have some exclusive areas where they can levy tax. Those taxes, that includes company’s profits is exclusive forte of central government and thus are referred to as direct taxes. And indirect taxes are levied on manufacture of goods or provision of services, are also acumen of government at centre. Only taxes on consumption are exclusive domain of state governments.
With GST the tax barriers from state will be removed and a single market will be created and one will experience transparency in taxation that would deter governments from indiscriminately increasing taxes and consumers will not end up paying tax on tax as it happens when the goods move across state borders.
Not only there will be amendments in tax laws and reforms but also every manufacture should modify his working set up in tune with the GST norms. Manufacturing sector in India is the major economic driver. GST is expected to provide major boost to the already lagging manufacturing industries as it will hand out a transformation shift from a complex multi tiered tax structure to one that is integrated and stable.
Among many impacts that GST has on manufacturing sector, the major ones are:
- Reduced cost of production
- Increased working capital
- Hassle free movement of goods
- Restructuring of supply chain
- Area based exemptions
- Improved Compliance requirement.
Several Indian manufacturers have begun their discussions with their IT vendors and tax advisors to upgrade their systems to enable tracking of goods and analysis of tax and other cost implications once the GST regime comes to force.
Companies are more conscious on upgrading their Enterprise Resource Planning (ERP) – business management software to attune the complexities of calculating GST. ERP aids the companies manage and monitor everything in the organization, including supply chain, finance, and even human resource functions.
Companies must move from their current system, where every transaction is recorded separately to an upgraded system where there is correlation between every entry, in tune to the industry executives. Manufacturers widely use ERP systems mainly for supply chain management. Say for e.g. a product manufactured in Mumbai reaches the mall of New Delhi; the ERP records every stage of the movement including the goods carrier’s passage through check points.
But as per current system every state is treated differently, while GST aims to make India a common unified market place and thus required modifications and changes must be made in ERP software – procurement, warehousing and impact on vendors and customers among other changes.
With GST, ERP software will be affected in following way:
- Adaptability
- Scalability
- Customization
The changes in ERP will need to factor on various parameters including procurement, warehousing and impact on vendors and customers among others. Most enterprise must upgrade their systems; that links entries accurately as against their present system that records their transactions separately. Since GST will mainly have impact on data management and taxation, among other things the manufacturers must consider present versions of finance solutions and customer specific developments and plans accordingly.
GST roll out will be a great challenge for the companies in terms refreshing their ERP systems. Integrating new tax system with existing software is tough call and companies must be clear as which module of the software will be affected and how they will harmonize the changes with GST.
With GST on floor, the manufacturers and IT vendors must opt for more hybrid solution that blends on premise functionality with cloud solutions and that adapts GST scenario in the current software setup.
For any type query related to ERP please visit http://www.knowiterp.com or call 09811119075