ERP Buying Checklist

By Neil Zawacki
Updated: September 01, 2011

ERP software provides a comprehensive means for small businesses to manage and automate their financial activities. Not all products are the same, however, so you should do some research before making your decision.

Here is a checklist of the most important features of an ERP system:

Centralized Database – You should always make sure the ERP solution has a centralized database. This will allow the sales department, marketing department, accounting department to have access to the same information. This can save a great deal of time and eliminate the need to transfer important data.

Human Resource Management – You’re going to need this module to deal with things like performance management, time and labor tracking, and handling the payroll. The software should also be able to administer benefits and manage compensation for employees when it needs to be paid out.

Financial Compliance Assistance – The ERP solution should make sure that your company stays in full compliance with all of the different financial laws and regulations. It should also be able to follow any company or industry-specific sanctions that your business needs to conform to.

Supply Chain Management – Supply chain management allows you to improve the flow of products through your organization. It can deal with logistics, schedule shipments, and procure the materials required for smooth operations. You’ll probably see a great deal of variability, but as long as there is some form available you should be fine.

Service Oriented Architecture – The ERP software should be able to route information between the different systems and applications without having to connect them to each other. You can then change them whenever you want without having to write new code for the processes.

Production Planning – This module provides an efficient way to organize data relating to planning a product. It can also estimate how many products should be made by looking at the prior sales of an existing product, thereby reducing the danger of ending up with more than is likely to be sold.

Bank Reconciliation – Bank reconciliation is on the checklist because it can help to keep your finances in order. More specifically, it will note the difference between the amount of money on the books and how much is actually available to spend. This can significantly reduce costly errors that often take a long time to recover from.

Vendor Security – Security is extremely important with ERP software. You’re going to want a solution that can encrypt the data fields at both the database level and the table level. It should also automatically generate a report if a user requests sensitive information like a social security number or credit card number.

Featured Research
  • ERP Showdown

    Moving to the cloud is a big trend with almost all business tools, and ERP is certainly no exception. But that doesn’t mean cloud-based ERP is right for every business. On-site solutions still hold distinct advantages, and understanding the pros and cons of each options is critical to seeing maximum ROI. more

  • Behind the Innovations in SAP S4HANA Finance Cloud

    Nine benefits of the cloud continue to outweigh the risks, including potential vendor lock-in. Those who make the shift to the cloud boost innovation in reducing the cost of ownership, cost of maintenance and complexity as well as in gaining mobile access, increased value, integration, and self-service business intelligence. more

  • i-ERP (Intelligent ERP)

    Digital technologies are impacting all aspects of business and society, changing our workplace, culture, and way of life significantly. This study provides a framework based on three dimensions for understanding this movement to i- ERP and for assessing the progress of vendors to realize the promise of i-ERP and intelligent systems. more

  • How Finance Leadership Pays Off

    CFOs today face an ever-lengthening to-do list. The demands of the global and digital economy have multiplied the finance team’s responsibilities to areas far beyond its traditional scope. Executives must balance their traditional finance activities, such as optimizing working capital and risk management, with the strategic mandate to accelerate innovation and evolve the business model. more

  • Managing the Transition to SAP HANA

    The pace of business change in the digital era requires faster access to information to drive proactive responses. SAP HANA, powered by in-memory technology, enables real-time access to the freshest information, in support of digital transformation. more