5 ways an ERP can improve cash flow

Updated: June 02, 2009

ERP Systems offer functionality that can streamline the contract, expense approval and payment approval process allowing an organize the flexibility to make real time decisions regarding cash flow

  1. Purchase Orders - An ERP system allows for the quick creation of Purchase orders. By requiring purchase orders for all expenditures, an organization can quickly review and approve terms of the underlying contract. ERPs and Purchase Orders prevent the rogue employee from signing an unfavorable deal
  2. Understanding commitments - Based on the total value of approved purchase orders, a business has real time access to liabilities or committed capital. Managing a budget versus committed capital prevents over expenditure compared to managing a budget versus actual expenses booked.
  3. Receiving - ERPs offer the ability to receive against purchase orders as part of the invoice approval process. This allows the budget owner to confirm that what has been invoiced was actually delivered by a vendor and prevent over payment.
  4. Forecasting - Most ERPs offer a budget forecasting model which allow various stakeholders to reforecast their budgets based on the timing of expenses. If the marketing department is under budget for a particular period, the positive variance to budget may not real, it may simply be timing. This module allows periodic updates to budgets so stakeholders can inform finance/accounting when expenses will hit.
  5. Reporting - ERPs provide real time reporting so decision makers can view period expenses/cash flow. This provides a business the ability change its spending behavior ahead of the month end accounting close.

Featured Research
  • 10 Contact Center Myths Busted

    For most forward-thinking companies, the use of contact center software is on the rise. That said, in spite of contact center software’s sudden rise in popularity, a number of myths have begun to take shape. more

  • Go Mobile and Increase Employee Productivity

    The Bring Your Own Device (BYOD) and Voice over Internet Protocol (VoIP) tech trends now allow people to work whenever, wherever, and however they want—mobility makes it happen. more

  • [Infographic] How to Select a Phone System in 10 Steps

    Choosing the perfect phone system for your business is no small task …. Depending on the size of your company, the industry in which you work, and the specific needs your phone system will be required to meet, any number of solutions could get the job done. more

  • SMB CRM Providers Comparison Guide

    A good SMB CRM system can be an incredibly valuable asset for your business. As more businesses recognize this value, the amount of SMB CRM vendors is expanding quickly. Navigating the pricing plans, features, and service terms of all these can be a decision-making nightmare. more

  • 2017 Business VoIP Cost Guide

    Reducing expenses is one of the main reasons that businesses switch from traditional office phone systems to VoIP technology. But many people rush this decision and end up spending more than they need to. The costs of implementing a new VoIP system can increase quickly, especially if you don’t strategically plan for it ahead of time. more