Table of Contents
What is the ERP Financials Module?
The ERP financials module is a piece of software that collects financial data and produces reports. It improves your ability to convey financial data to other parties, like suppliers and consumers. Accounting features including general ledger, budgeting, accounts payable, accounts receivable, and more may help you achieve this goal.
ERP Financials Module Features:
An ERP financials module often has the following characteristics:
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Accounting record:
A company’s financial transactions may be seen in its general ledger (GL). Using a system of numbered accounts, including cash, inventories, accounts payable and receivable, and capital, it keeps tabs on revenue and expenditures, assets, and obligations.
Important reports generated by the financial module are the income statement (which displays revenues and expenditures) and the balance sheet (which records assets and liabilities), both of which rely on totals in the general ledger.
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Bills that need to be paid:
In order to keep track of the money that a company owes its creditors and suppliers, it employs the accounts payable function. Businesses may save money and time and reduce the likelihood of human error by automating accounts payable.
Better management of cash flows is another benefit of accounts payable (AP), which connects an organization’s payables data with its buying system. This purchasing system might be a component of core finance or a distinct module.
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Cash on hand:
Customer debt management is within the purview of the AR function. It keeps tabs on payments and handles invoicing and cash. Automating the generation of periodic bills, financial statements, and payment reminders is possible using this function.
A corporation may improve cash flow and customer happiness by automating the AR process, which accelerates collections and makes it simpler for consumers to pay.
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Management of fixed assets:
Computers, industrial equipment, and cars are just a few examples of the actual assets that businesses utilize this capability to monitor and control.
Depreciation calculations, compliance requirements, and tax consequences are all factors that may be taken into account by a company via fixed asset management. It may get a clearer picture of its fixed asset utilization, expenses, and upkeep with the help of this function.
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Product acquisition:
An organization may use the basic buying capabilities of most ERP financial modules to acquire goods and services. These capabilities even include generating necessary documentation, including purchase orders and requisitions. Before payment is completed, it is required to verify that vendor invoices match the information in AP.
In most cases, this may be accomplished via integration with AP. Typically, organizations that need robust purchasing capabilities use a more advanced procurement module from the ERP vendor or a third-party supplier, particularly when acquiring manufacturing-related raw materials and components.
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Managing risks:
Predicting, analyzing, and managing risks to an organization’s operations and financial stability is made possible by the enterprise risk management elements of the finance module. A good illustration of this is how managing credit risk may help a business prepare for accounts payable in the event that a client is late with a payment.
Security, legal liability, compliance, and reputational risks are some of the other types of hazards that risk management tools may assist businesses with.
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Providing information:
While some programs may generate reports and audit trails necessary for regulatory requirements, basic reporting capabilities provide access to financial data, often in real-time, and assist a firm in preparing financial reports, usually for internal use.
A business may make data-driven forecasts and choices about its finances using the reporting features’ access to ERP financial data. With analytics and business intelligence tools, a firm may see its revenue picture more clearly. Financial data, including current and projected sales and costs, may be shown on dashboards.
