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Top 5 ways how ERP applications help financial services firms drive sustainable growth?

How-can-ERP-applications-help-financial-services-firms-drive-sustainable-growth
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Summary: Each company needs to record the money flowing in and out of business within a specified duration. No company can survive without accounting software that stores, creates, and reports various financial transactions. But ERP applications, such as effective financial management software can do a lot more, including measuring cash flow, optimizing profitability, ensuring compliance, determining tax obligations, and maintaining long-term enterprise sustainability.

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Core benefits of financial management software

Financial management is a vital ERP application that allows companies to manage, track and govern their assets, expenses, and income. Of course, the primary purpose of any financial management application is to manage an organization’s daily business activities. But it helps achieve several other objectives like protecting critical financial data from cyber-attacks and frauds and maximize profits in the long run. The below infographic explains the core benefits of an accounting system.

Compliance with current and future accounting standards.
Private and public enterprises need to adhere to national and international accounting standards that normalize financial information through a set of definitions, rules, and processes. But sometimes existing standards undergo drastic changes, and new standards are implemented, for example, ASC 606 and IFRS 15. Therefore, a financial management system must be able to comply with existing accounting standards and should be flexible to adapt to new changes.
Error-free financial stewardship
Financial management software should be more than a digital bookkeeping service. Besides recording critical financial transactions, it should also help shorten invoicing cycles, complying with changing regulatory requirements and tax laws, and optimizing cash flows.
Data and security systems
Financial management software must protect against cybercrimes, frauds, and hackers who try to steal critical data. In addition, it should guarantee comprehensive system security so that financial transactions and digital receipts are stored safely within the company’s repository.
Accurate financial data
Apart from basic accounting, financial management software helps deliver better budgeting, improve forecasting, eliminate redundant records, streamline integration into banking systems, track liabilities and assets, and enable more accurate audits.
Scalability for growth
The systems and processes of a company grow as its size increases. Therefore, financial management solutions should rapidly scale to manage growth across various geographies, markets, and products.
Connected enterprise solutions
Financial management software is an essential part of Enterprise Resource Planning (ERP) software that connects data across various organizational departments, including sales & marketing, logistics & warehouse, customer relationship, and production departments. It helps to get a comprehensive view of the financial activities occurring across different departments.

Essential functions of an all-inclusive, comprehensive accounting system

Financial management software is an integrated ERP application that provides the following benefits to organizations across the following functional areas:

Accounts Payable (AP) and Accounts Receivable (AR)
Financial management software keeps records of amounts due to vendors for the products they purchased. Similarly, it also tracks how much vendors are liable to pay to the company.
General and sub-ledgers
Financial management solutions minimize implementation costs. The best part is that companies don’t require any middleware or additional hardware.
Employee expense management
Financial management software allows employees to make self-service entries and map those expenses to travel and project accounts.
Asset management
Inventory management requires identifying the cost and condition of assets and operational & capital data to prepare financial statements concerning the depreciation and appreciation of assets.
Collections management
This feature of financial management software allows formulating different collection strategies for customers and suppliers, managing collection payments, and ranking customers.
Risk management
Financial management solutions have various audit tools and internal controls to safeguard companies from cyberattacks and frauds. This feature also helps adhere to payment rules and exercise Segregation Of Duties (SOD).
Reporting & analytics
Financial management software provides valuable insights by storing, sorting, and analyzing data from multiple sources that help estimate the company’s real-time financial situation. Moreover, it also contains data visualization tools that significantly improve financial performance by allowing authorized stakeholders to access real-time information.
Revenue management
Financial management systems automate regulations like IFRS 15 and ASC 606.

The Reports and analytics feature in the financial management module

Why are reports necessary for organizations?

Companies of all sizes require reports for getting a 360-degree view of their:

  • Income
  • Expenses
  • Balances 
  • Month-end/quarter/annual close

While companies had software to generate reports, they couldn’t adjust these reports and add derivations for other needs quickly and conveniently. 

Today, in this cut-throat competitive ecosystem, organizations need to generate prebuilt reports that can be adjusted quickly and provide an in-depth analysis of the company’s financial situation. This is where the financial management module comes into the picture. It has top-notch visualization tools that provide operational visibility. Moreover, it produces the best quality reports based on real-time business data that improve productivity, enhance decision-making abilities, and streamline operations across all business departments. 

The Ultimate ERP Guide
The Ultimate ERP Guide
  • Better financial planning and enhanced employee performance

Financial management software is an essential ERP application because it assumes several roles apart from managing monetary mechanics (credits and debits) and generating financial reports, such as:

  1. Streamlining operational processes
  2. Cutting operational costs
  3. Checking whether the company is following best financial practices
  4. Automating redundant activities so that employees can focus on mission-critical tasks
  • Attracting the next generation of employees

Millennials and Gen Z make up the maximum number of employees worldwide. If you want to attract these tech-savvy generations to work for your company, you must upgrade yourself by implementing state-of-the-art infrastructure. For example, ERP applications like financial management systems have an intuitive user interface, facilitate free-sharing of crucial information across various departments, embed social media tools, and are easy to use. These features attract the next generation of employees to work with you.

  • Scalability matters

Do you want to expand to new geographies?

But are you ready to face reporting and compliance challenges?

Is your software scalable enough to accommodate new market requirements?

Do you have an efficient solution to take care of new short-term and long-term liabilities and additional assets?

Financial management software provides practical solutions to all the challenges mentioned above. Further, it also helps identify qualified vendors, suppliers, and distributors and manages distinct payroll policies for different countries. 

On-Premise or Cloud-enabled Finance management software (FMS)

The table below reveals why organizations prefer cloud-based finance management software over On-Premise.

On-Premise FMS requires a lot of maintenance.
Legacy FMS needs regular maintenance, such as upgrades, bug fixes, and patches that require expert technicians. On the other hand, third-party vendors maintain cloud-based FMS. So, companies don’t need to keep a separate IT team which lowers the operational costs.
Cloud-based FMS saves time and money.
On-Premise systems require an immense amount of money, time, and resources to keep them running. On the contrary, third-party vendors are responsible for hardware refreshes, upgrades, custom code management, backups, and disaster recovery in Cloud-based FMS.
No extra licenses are required.
On-Premise systems require an immense amount of money, time, and resources to keep them running. On the contrary, third-party vendors are responsible for hardware refreshes, upgrades, custom code management, backups, and disaster recovery in Cloud-based FMS.

Software as a Service (SaaS) will become a potent weapon to advance next-generation financial management systems.

Businesses are transforming rapidly in the digital age. As a result, they are experiencing new challenges and developing affordable solutions to counter them. Cloud-enabled ERP systems are already helping organizations to take on new competitive pressures and disruptive market forces head-on. 

The below table explains the unique features of the financial management module of Sage 300cloud and how it helps enterprises make a strong foothold in this new digital economy.

Top-notch security systems
Our cloud-enabled FMS uses a highly secured data warehouse to store business-critical financial information. In addition, it has advanced security algorithms that monitor and restrict anonymous or unauthorized stakeholders from accessing crucial data.
Best quality reporting features
The reporting features allow organizations to store essential data in spreadsheets that are accessible to all authorized stakeholders. As a result, companies can ditch disconnected spreadsheets that can be corrupted, deleted, manipulated, and misplaced. The best part is that departments can conveniently access and share files authored by others. For example, the product development team can quickly download client feedback from the central repository without requesting access from the customer service department.
Ensures core financial competencies
We deliver various crucial financial solutions like expense management, risk management, accounting & finance, project portfolio management, and direct & indirect compliance.
Intuitive user experience
Our cloud-enabled FMS consists of new-age social tools that enhance productivity and maximize collaboration.
Collaborative solutions under one roof
Our proprietary FMS system provides a collaborative solution that offers solutions across all business areas, including supply chain management and logistics, human resource management, customer relationship management (CRM), sales & marketing. The best part is that it breaks information silos, thereby allowing free-flow of critical information between various departments.

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At Sage Software Solutions (P) Ltd., we are home to world-class ERP software and CRM software that will solidify your business tech support fundamentals and enable you to build a customer-centric organization. You can also write to us at sales@sagesoftware.co.in.

Disclaimer: All the information, views, and opinions expressed in this blog are those of the authors and their respective web sources and in no way reflect the principles, views, or objectives of Sage Software Solutions (P) Ltd.

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