11 Reasons You Need ERP Software

Mark Canes

In order to scale a wholesale and distribution business the software solutions in place are vital in aiding in automation and increasing process efficiency. It is easy to become comfortable with what you’ve got and create workarounds for lack of functionality but you have to think about the limitations and missed opportunities.

Does your software include a component for automating calculation and remittance of sales tax? Can it factor landed costs into recorded inventory values and costs of goods sold? Does it create meaningful financial and management reports? If you answered no to any of these questions, it may be time for you to consider upgrading your ERP software.

There are many reasons why it's time to consider upgrading your software system, in addition to just a lack of functionality, and even more excuses as to why you haven’t upgraded to this point.

However, once you understand the potential benefits of a properly implemented new ERP system, you’ll be excited about the possibilities offered to increase profits, reduce costs and facilitate growth. If your business can identify with the below 11 reasons, it may be time to update existing systems for all-in-one ERP.

All-in-One Solution

If you have to manage information across multiple, standalone solutions reporting and processing can take longer than necessary and there is more room for error. This type of system is more confusing for employees and makes it more difficult when training new people.  In addition, when a problem arises, you may have to speak with various people from different systems in order to get it resolved. Having everything available in one single interface creates unified data for cross-departmental collaboration.

Automation Opportunities

Without an automated system for dealing with everyday processes, employees will have to resort to using manual workarounds for calculating commissions, dealing with credit card transactions, entering sales orders, recording online payments and more. Lack of an automated system can also lead to keying errors and can turn order processing and invoicing into a slow and cumbersome, process, upsetting customers, employees and partners of the supply chain.

Sales Tax

A proper and automated calculator for dealing with sales tax remittance makes it easy to deal with customers and other members of the supply chain from all over the globe. It means not having to research and track different country and region’s tax regulations and ensures you receive and pay the fair price for product automatically.

You Manage Multiple Currencies

If your business deals with customers and vendors around the world, you likely require functionality for managing multiple currencies. Manually calculating exchange rates is a time-consuming and error prone process that can hurt your business and relationship with partners. Instead, robust ERP software allows users to automatically specify different prices for each item depending on the customer’s and/or vendor’s currency and accounts for differences in exchange rates between transaction and settlement dates as necessary.

Regulatory Compliance Requirements and Product Tracking

If your company operates in an industry that moves potentially harmful or perishable products, having lot tracking software is not only beneficial but also the law. This type of software allows your company to deal with product recalls immediately and efficiently –eliminating the risk to consumer health and customer perceptions. Instead of having to recall all shipped products – lot tracking allows you to determine which products have been compromised, where they are and how you can get them back.

Lack of Custom Reporting

If you’re not able to generate and create meaningful management and financial reports on a regular basis it is impossible to analyse the success and growth of your company. Sure, you can manually re-key information into Excel each month, but this is very time consuming and creates a large margin of error. Your software system should instead be capable of automatically generating reports for you that can be printed, emailed and shared in order to assess the health of your company to help improve processes and reduce costs.

System Limitations - File Size, Users and Data

It should not take longer to process an order than it is to make a sale. Your software capability should never be the reason behind not serving customers or completing a sale. If your current software system is slow or you do not have enough space to manage all your data, this will only increase the magnitude of problems into the future as your company continues to grow.

No Personalized Support

Having a support contact that knows your business and the industry inside and out can have huge benefits for your company. These support people should be able to help you solve any problems that you’re experiencing with your software and reporting processes within a few hours of you contacting them. Having support that is localized and the ability to speak with the same contact person each time is an added bonus and will allow your company to realize huge time saving benefits and decrease frustration levels when things go wrong.

Double Entry  

If you’re using Excel and certain other introductory software systems, such as QuickBooks you may have to manually take information from one system and transfer it to another which can result in a lot of entry errors.  Errors can be essentially eliminated when information automatically moves throughout your software system.  This will reduce the amount of data lost and incorrect business information being transferred and can ultimately improve customer satisfaction and your bottom line.

Multiple Selling Channels

Not all systems allow you to easily integrate with existing eCommerce platforms and marketplaces such as Amazon. Look for a solution with a track record for eCommerce integration and an API that allows you to easily connect to multiple solutions.

Landed Costs Management and Tracking

The ability to factor landed costs into inventory values and costs of goods sold is imperative to ensure that the gross margin your company receives on product matches your calculations. Proper landed costs will also directly affect things such as pricing decisions and commission payments.

Other reasons why it may be time to upgrade include...

  • You're missing important industry-specific features such as lot tracking, service and repair and point-of-sale. 
  • Users are easily able to delete transactions and you're worried about having a proper audit trail in the system. 
  • You are looking to add a second warehouse and want to be able to track inventory information across multiple locations. 
  • The vendor you work with is no longer developing the software and you will soon run out of support. 
  • You want to start using barcode scanning to improve your receiving, picking, packing and shipping processes. 
  • You want to find a technology partner - someone who understands your business, and can offer advice and tools to help you grow. 

It’s amazing (and quite entertaining) to learn about some of the creative workarounds businesses have designed to manage daily operations, when software exists to automate these activities in a fully integrated system.  Each business has unique needs, but on the other hand there are several reporting features and applications that should be an integrated part of every ERP software system (in addition to add-ons and customization work that can cater to individual company processes).

Taking some time to research the functions provided by ERP software systems will give you a better understanding of the functionality that you could now be enjoying.