Can a Cloud Enterprise Resource Planning (ERP) system help my business as it grows?

Adopting a Cloud ERP system into your business can maximise the growth journey

The transition to a Cloud (ERP) system from a simple accounting platform is one that many businesses perceive as being both complex and costly, however the reluctance to transition could cost substantially more over the longer term. For high-growth businesses, the timing of a Cloud ERP implementation is crucial to support continued growth and give real-time visibility on financial performance. If left too long it can stall expansion plans and therefore early implementation can be advantageous.

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What are the benefits of Cloud ERP for growing businesses?

Quality financial information allows for more informed decision-making, which is crucial for fast-growth businesses particularly when there are multiple entities with various revenue streams. Cloud ERP accounting systems produce real-time financial information which provides stakeholders with the data to make the right decisions, rather than waiting until after the month-end management accounts have been produced, which could be three weeks later. There are multiple other benefits of operating a Cloud ERP system:

• Numbers that stack up – businesses early in their growth phase often build a finance environment which is based around a standard accounting package that is propped up by other platforms which are used to manage and control the relevant area of the business, whether it be sales, procurement or inventory. Ultimately, issues often arise when the reported figures in the financials do not reconcile back to what has been recorded on the separate platforms. This gives no reliability that the platform is accurate and causes problems in trusting the data to make sound operational decisions.  Cloud ERP systems use a single source of data which mostly isn’t reliant on additional platforms that don’t integrate therefore the information being reported is reliable.
• Multi-entity consolidation – business growth can be achieved organically or through acquisition and on the growth cycle there is a high likelihood that the business will at some point be formed of several different entities. A Cloud ERP system provides a single platform where the financial data of multiple entities can be stored allowing for convenient multi-entity consolidation on the one platform, and also multi-company data interrogation through one login.
• Multi-jurisdiction reporting – when businesses pursue growth overseas, there will come a point where the overseas entity will need to report in line with local tax and reporting requirements, whether it be local GAAP or IFRS. Rather than using a local accounting platform which is detached from the main business platform, Cloud ERP systems can provide a reporting environment which complies with most jurisdictions, allowing the data to be kept in one platform without any manual interventions.
• Scalability – fast-growing businesses often reach breaking point on their accounting platform as it may not handle the volume of transactions or record transactional data to the level of detail required for FP&A analysis. ERP systems provide a solution whereby millions of transactions can be stored in one central database and provide plenty of room for growth.
• Sale – when a business is going through the sale process there are multiple factors which influence the price. One key area is the robustness of the finance system and the quality of the financial information. At point of sale, there will be a substantial amount of due diligence work required, delving into almost every area of the financial system and there will be a need to have quality financial data readily available at a detailed granular level. Having an ERP system in place that is able to produce this information will go a long way in accelerating the sale process as well as giving inward investment assurance that there is a reliable ERP finance system in operation.

The trigger for a transition to an ERP solution usually arises when the existing accounting platform is no longer able to fulfil the requirements of the business resulting in the finance team spending unnecessary time collating information from various sources, whether it be for multiple entities or reporting analysis. Investing early in an ERP solution will provide the functionality and detail to maximise the profitability of the business’s growth journey. The earlier the adoption of an ERP system, the less complex the process will be.

If you would like to know how we can support you, please contact us today for a free 30-minute consultation.

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