All kinds of organizations, small scale, and large scale, benefit from implementing the ERP finance module. The financial module is the core of many ERP software systems.
It gathers financial data from various functional departments and generates valuable financial reports.
Reports such as general ledger, trial balance, balance sheet, and quarterly financial statements.
ERP Finance module will take care of all accounts-related entries and their impact on the whole system.
How finance comes and how it is utilized. That will reflect the total flow of money (Cash/Bank) and total expenditures.
As an aftereffect of this, the management will take their crucial financial decision and Budgeting. Management can come to know about the company’s financial position at any moment.
ERP finance module helps to generate all sorts of critical financial reports like,
- Trial Balance
- Trading A/c
- Profit & Loss A/c
- Balance Sheet
- Debtor’s Balance
- Creditors Balance
- Cash/Bank Fund position
and many more are covered in this module.
General Ledger (G/L)
The General Ledger module is the foundation of your accounting system. It meets the current and future financial management requirements of organizations of all types and sizes.
It provides a robust feature set designed to handle your most demanding budgeting and processing needs.
General Ledger integrates with all modules and is the key to maximizing the efficiency and accuracy of your financial data.
The G/L Security module enables access control. For example, organizations can control which users can view or use certain general ledger accounts. The above is based on segment validation in G/L Security settings.
G/L Consolidations lets you transfer and merge the General Ledger account. In addition, it combines transaction information between separate companies and branch office locations.
It is also designed to enable subsidiaries and holding companies to run without using the same network or accounting database.
G/L Consolidations provides a feature set that allows your company to define the level of detail to join and provides a comprehensive audit trail.
Useful features of ERP Finance module
- A general ledger provides you with a record /track of all financial transactions.
- To integrate your payable data with your purchasing system, use Account payable. Using this feature, you can easily track and control your cash flow.
- Account receivable is a feature to track customer payments, and it allows you to automate tasks like sending payment reminders.
- Profit tracking is the best feature to view the overall financial performance. It helps to see how your business is using its financial resources. And also, it is used to calculate how much your organization is profiting from your efforts.
- To track your company assets like equipment, computers, company cars, etc., you can take the help of Fixed asset management.
- It is difficult to manage multiple currencies if you have clients worldwide. Multi-Currency management is a suitable feature to handle it. It allows you to automate the process of both buying and selling in foreign currencies.
- To provide a uniform collection of sales and taxes, Tax management is the best choice.
- To analyze and manage your organization’s crises, Risk management is a good feature of the finance module.
- Reports show you where revenue is generated and where it is not generated. Thus it helps you to understand the financial condition of your company.
Inter-company transactions using ERP finance module
The inter-company Transaction module lets you enter General Ledger and Accounts Payable transactions that affect more than one company by automatically distributing transactions across two or more companies.
In addition, its built-in flexibility automatically generates intercompany loan account entries according to user-defined relationship tables called routes.
Inter-company Transactions simplify and significantly reduce the amount of work required for intercompany accounting.
ERP finance module is completely transaction-based, unlike journal-based. That implies most accounting functions are handled through relevant transactions in other modules, thereby saving time.
The module contains complete functionality required for any accounting department, from vouchers to the balance sheet and profit & loss account.
Budgeting and variance analysis between budgeted and actual figures helps in controlling the enterprise expenses and income efficiently.
The ERP finance module also includes cost centers, which are entirely flexible in defining their components.
Cost allocations for general overheads can also be done pre-defined and generate required outputs for analysis purposes.
Outstanding payables & receivables with an aging analysis of both debtors and creditors are some of the features of this module.
Overall the module takes care of the complete functions of any accounting department.
Advantages of ERP financial module
- Enhances productivity: ERP finance module automates the financial process and reduces manual work. That leads to savings of time and hence increases productivity.
- Provides financial clarity: With the help of analytics and a general ledger, an authorized person gets the information about the organization’s financial condition.
- Increases data accuracy: As the ERP finance module reduces the manual entry, human errors also reduce. It also helps to detect and avoid mistakes. Hence you will get accurate data.
- Tracks documents quickly: All account-related documents will be in digital form and will arrange them in a proper file in the appropriate place. So it is easy to track the required documents.
- Helps in forecasting: ERP finance modules reporting system and analytical system help the organization plan and forecast its costs and revenue.
- Consolidation and centralization: The organization can get all the financial information in one place. This module integrates easily with other ERP modules.
- Automatic payment: There is no chance of missing payments to any employees because of the account payable feature of this module. It informs the organization about the coming amount through notification.
How does it work?
The function of the ERP finance module starts with account creation. Then, external departments like marketing or purchase will create some of those accounts.
Apart from regular voucher entries, this module provides financial figures, which will help the authority and other departments.
This model will generate a financial account and documents like account receivable and account payable statements.
This module bridges sales & procurement processes. Password will protect all figures. The only authorized person will be eligible to access information from this module.
Fund manipulation control
Funds manipulation concerns are an essential factor, and sometimes it is treated as blood for an organization. So in this regard, sources of funds and application of funds are to be taken care of by defining.
- Balance sheets
- General and Sub-Ledger
- Party and customer masters.
Also, the various input transaction such as,
- Voucher Entry
- Credit/Debit entry
- Cash/Bank receipts
- Cash/Bank Payment
- Bank Reconciliation statements
- Bill verification.
Then finally, different types of financial reports can be of various types according to specified company standards.
ERP finance module provides businesses the control and accountability of their finances.
Vendors of ERP finance module
Right now, the market consists of many numbers of ERP vendors. Many of them provide all modules required to the different businesses.
According to your type of business and industry, you can choose the vendor for the perfect financial management of your business.
Infor, SAP, Microsoft, and Oracle are four major ERP vendors. Vendors provide different deployments also such as Saas, on-premise, and cloud.
First, you can have the finance module with cloud deployment and other modules with on-premise, and eventually, you can change the deployment type from on-premise to cloud.
Saas, also you can use. It helps to share the single document with multiple clients that helps to reduce the cost and standardize the business practice.
Oracle NetSuite, Acumatica, and FinancialForce are good, well-established SaaS ERP vendors.
Find more about the ERP finance module and other related ERP modules here.