ERP Solutions Can Improve Cash Flow

How Does an ERP System Help You Improve Cash Flow?

CentralBOS

Effective cash flow management is critical to any successful wholesale or light manufacturing organization.

Historically, many companies have been able to grow with manual systems or the stacking of multiple applications. But over time, with the loss of a key employee or with rapid growth, these systems start to inhibit a company’s ability to grow. Managing a company with multiple systems and multiple databases directly impacts your ability to:

  • Access accurate reports to manage inventory and billing processes
  • Produce accurate forecasts
  • Sell effectively to your customers
  • Resulting in poor cash flow management
  • And poor working capital visibility.

To remain competitive, in today’s just-in-time supply chain management environment, it’s imperative for every company to find the most efficient way to take full ownership of their business processes that relate to effective cash flow management. This includes every aspect of their sales, billing and fulfillment processes to improve visibility and speed up business processes that impact inventory management, billing and collections.

One way to accomplish this immediately is with Enterprise Resource Planning (ERP).

Below is a quick overview of some of the ways that an ERP solution will immediately improve a company’s cash flow and cash flow management.

Visibility to Control Inventory and Costs
Inefficient inventory can lead to increasing inventory costs up to 25%. This is driven by inventory write-offs and increased warehouse labor. An ERP platform will provide each user in the system, across every function, access to real-time inventory information that’s automatically updated. This means you can stop managing Excel spreadsheets, which lead to errors and delayed information. With an ERP solution, everyone is connected and everyone has access to all vital information required to do their job with seamless communication. For example, sales managers no longer need to call the warehouse to determine what’s available for selling. They can place the right order, at the right time and communicate accurately with the customer the first time.

Reducing backorders is yet another benefit an ERP platform provides. Smart replenishment tools in your ERP platform can help you keep enough inventory in the warehouse to prevent backorders without ordering too much.

>>> WATCH “HOW DOES AN ERP HELP CFOS AND FINANCIAL MANAGERS?”Get Paid Faster With Automatic Invoices from the Field
There is a significant time gap between service delivery and billing when invoices are managed manually. When you connect your service techs to an ERP platform through their mobile devices in the field, you can bill the customer before the technician even leaves the customer’s premises. You don’t have to wait for the next billing cycle to send an invoice. An ERP solution allows you to forget about monthly, bi-weekly, and even weekly billing cycles and move to an on-demand billing system. You can now bill the customer right after the work is completed.Overdue Invoices Management
Integrating an ERP system allows you to check invoices to determine which ones are overdue. This is because all of your collection information and receivables are stored in one location. The dashboards are user-friendly, and it’s never been easier to see what’s going on with your cash. You can see which invoices are open and which are dated. At a glance, you can monitor the frequency of payments, along with extensive information of collection efforts in process.Monitor Current and Future Cash Flow

An ERP solution allows you to have better insight into your cash position through the consolidated data it delivers, enabling you to monitor current and future cash flow. Once you understand your cash position, it becomes easy to plan for the future and take proactive steps to manage receipts and payments. Making smart decisions across the business is a breeze when everything is transparent and easily accessible. From inventory and marketing to customer credit limits, payment terms and discounts, an ERP solution helps you turn margins into cash, reducing costs.Automated Workflows
With an implemented ERP system, a company can grow without having to hire additional employees. For example, employees will no longer have to call as many clients for payments, because the system automates the collection process and sends reminders to past due accounts. You can set predefined rules for the operations so you can rest assured business is running at optimal levels without incurring additional labor costs.Easy Inventory Control
Visibility is the critical component of inventory management. With real-time inventory updates provided by ERP systems, businesses are provided with controlled purchasing. You can see the items you need to reorder and those that aren’t selling. You can also determine the best time to restock through purchasing and planning reports and online inquiries. Efficient inventory planning lets you gain control over your inventory to avoid accidentally creating a surplus.

When it comes to business cash flow, knowing and understanding it is just as important for small companies as it is to enterprise corporations. The most efficient way to optimize the cash flow in your company is by installing an ERP system.Best Practices
When you work with a team of ERP implementation experts with a proven track record in your business vertical you will get access to business process experts. This will ensure you optimize your systems (and in some cases your operations) for cash flow efficiencies.

>>> WATCH “HOW WORKING WITH DOMAIN EXPERTS HELPS YOU OPTIMIZE BUSINESS PROCESSES”About Us
CentralBOS is an integrated, cloud-based ERP system designed specifically for the business needs of small to mid-size wholesalers, field service and light manufacturers. CBOS is the modern alternative to the ‘duct tape’ approach to managing business functions with an assortment of independent solutions. Our CBOS platform is an all-in-one software and services solution that:

  • Accounting (GL, AP, AR, billing, sales orders)
  • Financial Reporting and Analysis Management

Connects all your data and provides all the tools you need for improved business process management with best practices for more effective day to day operations including:

  • Inventory Management
  • Shipping and Warehouse Management
  • CRM
  • Order Management
  • HR / Payroll Tools and Services
  • Business Intelligence Tools and Dashboards
  • Customer and Vendor Portals

To learn more we invite you to SCHEDULE A FREE TOUR to find out how CBOS can help you optimize your company.

Cloud-Based Business Management Software