How to Get Cash Back into Your Business Faster with ERP

How to Get Cash Back Into Your Business Faster with ERP

By Steve May, Vice President at Terillium

Three business benefits of Enterprise Resource Planning (ERP) are significant as far as methods for quickly increasing the cash flow within an organization. These are also the fastest ways to recuperate a return on an ERP system investment:

 

ERP implemented correctly drastically improves inventory management – leading to many increased efficiencies including reduced costs. The focus of this post is how ERP enables faster cash collection through a lower Days Sales Outstanding (DSO).

It’s still critical to remember cash generation — or, rather, consistent and material cash generation. It’s the biggest factor in the long-term success of any business.”

– JOHN STEPHENS, CFO OF AT&T

A lower DSO ensures that the organization is collecting on its customer invoices as quickly as possible. Finances are negatively affected with a high DSO, as revenue is being held in customer accounts instead of being quickly fed back into the business for operational expenses or investments.

ERP systems provide accurate and timely information that is needed to collect on invoices quickly. Effective use of a few key ERP tools can ensure a lower DSO. This is a major business benefit when implementing an ERP system, and is also one of the best ways to see a rapid ROI on the ERP investment.

Take advantage of these key ERP tools to lower DSO

Real Time Notifications

By creating internal alerts customized to your business needs within the ERP system, you can be alerted in real-time when an invoice becomes past due, payment is incomplete, or any other event occurs. This allows you to take immediate action, driving cash into your business much faster. The system can send automated internal email notifications, and show a notification on the ERP interface upon login. Regular review of your books online, through these notifications will speed up the process of capital collection.Alerts can also be used externally. The ERP System can send automated emails to customers reminding them when a payment is due, in the case that your organization does not want to individually reach out to remind clients of invoices. Additionally, changes can be made based on the reports you can access in the ERP software– for example, if a customer is consistently late on payments, within the system you can adjust their payment terms for more effective collection.

User Friendly Dashboards

Having one central interface where you can view real-time financial information is crucial to getting cash in the door faster. With ERP software, all relevant information can be displayed or accessed from one place via customizable dashboards. From the dashboard you can:
  • Pull real-time digital reports
  • Sort and prioritize accounts with past-due invoices
  • Look up customer contact information
  • Re-send invoices
  • Review, and change, credit limits and terms
  • Record a promise or customer conversation notes
  • Setup a new alert based on when the customer promised to pay

Convenient Payment Options

Most ERP software systems enable organizations to collect payment via credit card, electronic payment, or check. This makes payment collection faster and easier, and decreases the time between sending the invoice and collecting payment.

 

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Vice President of NetSuite Practice

Steve May has 20 years of experience helping business leaders bring their vision to life. He helps clients define their business challenges, design solutions to solve those challenges, and implement successful ERP projects that result in lower costs, increased revenue, and higher customer satisfaction.