An Accounts system is often quite low on the priority list when SME manufacturers start the process of looking for a new ERP system. Whilst this isn’t always the case, we find that four times out of five, companies looking to implement new or replacement ERP software are more interested in driving efficiency across their operational processes and production and are content to leave the financial side of their business to continue as is.
However, including accounts and financial activities in your ERP system is the best-case scenario for most organisations, as there are multiple benefits to having better integrated data, in addition to the significant cost savings that can be realised by not having to pay for two (or more) software packages. These savings can amount to thousands of pounds each year and are a good reason to review what accounting functionality is available in any ERP system under consideration and what this might offer your business.
What to look for in Manufacturing Accounts Software
Basic Accounts Features:
There is some key accounting functionality that financial software needs to include. Many of the ERP providers who offer integrated accounts include the following in their entry level accounts package:
Sales Invoices – ability to create and post sales invoices to the general ledger as well as email/post to your customers
Sales Credits – ability to create and post sales credits to the general ledger as well as email/post to your customers
Cash Receipts – match cash receipts against sales invoices
Cash Payments – match cash payments against purchase invoices
Purchase Invoices – raise purchase invoices from PO’s or from scratch
Purchase Credits – raise purchase credits from a purchase invoice or from scratch
Journals – post manual journals or use an import template, ie .csv format
The above form the very basics of any accounts package – if the ERP system you are considering can’t offer these features, then it doesn’t have the necessary integrated capabilities to handle your financials and you should probably stick to the accounts system you are currently using. However, if an ERP system is lacking in this area, you might want to consider where else might it be lacking?
‘Nice to Have’ Accounting Functionality:
Once you are confident the basics are all covered, it’s time to investigate what other accounts features are available. For UK SME manufacturers, the most valuable of these features might include:
Additional Financial Reports – Trial Balance, Balance Sheet & P&L (by month or YTD)
Bank Transactions – import your bank statement and link these transactions to cash receipts/payments
Make Tax Digital (MTD) Compliant VAT Returns – VAT return will be calculated and digitally submitted to HMRC
Multi Currencies (with automatic postings to Unrealised/Realised Gain/Loss accounts) – system will auto calculate any exchange fluctuation between the system value rate and a transaction rate
Payment Runs – create a payment run and link to your bank to bulk pay
Expenses – employee expenses with approvals and ability to attach receipts
Cost Centres/Departments – if you want to split the costs of the business accross different areas, this feature allows you to assign costs to a specific cost centre and/or department for analysing/budgeting
Customisable dashboards – set up to show relevant KPIs to individuals ie sales invoices value for the month, purchase invoices to be paid or expenses to be approved, etc
Other considerations when reviewing Manufacturing Accounts Software
Once you’ve established whether the ERP system you are considering does offer all these features (or at least the ones you desire), there are a few further areas to consider. One of the main benefits of using an ERP with accounts is that you won’t need to pay potentially thousands of pounds more each year for a secondary package. However, you may find that the cost of the ERP system increases when you add in Accounts as it is often an optional extra for modular ERP software. Alternatively, basic accounting functionality may be included as part of the core system but the additional nice-to-haves often come at an extra cost, for example as part of a ‘silver’ or ‘gold’ tier pricing structure.
Some ERP providers, recognising that not every customer may want to avail themselves of their ERP Accounts offering, have developed API links to the most well-known accounting packages, such as Sage and Xero. This gives you an option to link your accounts data with your ERP system whilst still maintaining your existing software solution. The downside of this is that you continue to pay for two systems but at least this provides more of an integrated approach.
The E-Max Approach
At E-Max we offer all the above functionality in E-Max ERP. This is included in our standard pricing and there are no additional fees for using our accounts features. We believe that there are many advantages in integrating your accounts into your ERP system – at a minimum, it saves time and money and reduces manual errors and duplication – and we want our customers to benefit from these. We don’t offer tiered packages that you need to go through with a fine toothcomb to work out what functionality you need – with E-Max ERP you get it all, including access to all our financial reports.
However, we’re also not precious about our accounts functionality and we encourage our customers to make the best decision for them. If that means continuing with an existing software package and using an API, adopting a phased approach where you bed in your new ERP system before starting to use our accounts functionality or going full out with accounts from day one, we’re here to support you.
To find out more about our integrated accounts system and how it will help you manage your financials more effectively, take a look at our website, drop us an email or speak to one of our experienced ERP consultants on 0808 109 2035. Our team can offer you a short demonstration of our manufacturing accounts software working in practice – if this is an option you’d be interested in, please book a demo and our team will be in touch.