The important functions of ERP software that business owners need to know

If you have found this post, we assume that you are interested in optimizing the processes of your company and improving the productivity of the areas or departments that compose it. To achieve this, you must implement an ERP that suits your requirements, since there are different types of ERP, depending on the size of your organization, your sector of activity or the departmental area you want to improve. Nowadays, not all companies have the best management software, either because they have not been able to correctly define their current and future needs or because they use ERP software that has become outdated; for this reason, we will now talk about the basic functionalities of an ERP that will help you to improve your company's productivity, reduce costs and improve your competitive position compared to other companies in your sector.

An ERP is usually composed of different modules, each of them dedicated to different areas of a business. Therefore, the objective of an ERP is to control in real time all the internal processes of the company, improving management, coordination and communication between the different areas. Let's see which areas or departments an ERP system is usually integrated with and what functions it fulfills within each one.

Financial Control

Financial control is one of the fundamental functionalities that an enterprise ERP system should include. Financial management has always been and will always be a central aspect of enterprise resource planning, in fact, it is the reason why many companies decide to implement one. Regardless of the size of the business or the sector of activity, all organizations need to carry out an exhaustive control of their financial and accounting capacity. For this reason, an ERP software must be financial and include the following functionalities:
  • Accounts receivable/payable
  • Bank reconciliation
  • Fixed asset management
  • Month/year-end closing
  • Balance sheet generation
  • Automatic VAT and IGIC book preparationInventory management
An ERP system usually has a module for inventory management that allows companies (usually manufacturing and wholesale/retail distribution) to get an overview of inventory (products on hand), inventory planning (stock availability) and stock location. Within the inventory control module, we usually find the following functions:
  • Forecast
  • Inventory control. Stock levels
  • Shipping and distribution
  • Returns and cancellations
Warehouse management

Managing warehouses quickly and efficiently has become a challenge for today's companies. Therefore, it is very important that one of the basic functionalities of an ERP is warehouse management, so that it is possible to know at all times the path that the goods take, from the moment they enter the warehouse until they leave, as well as the current status of the warehouse. A warehouse management module should cover functions such as:
  • Real-time stock management
  • Inventory control
  • Space optimization
  • Picking and packing automation
Project management

Many companies in various industries work on a project basis, where many roles and factors are involved. Regardless of the sector, the type of work or client, there are a series of steps that are repeated in every project: bid, project planning, project progress, final balance, invoicing and project evaluation. Thus, in order to track projects from start to finish, it is essential to have an Enterprise Resource Planning System (ERP).

Some of the functionalities usually covered by the project management module are the following:
  • Capacity planning
  • Budget and estimate control
  • Work and process cost estimation
  • Project status and profitability analysis
  • Resource management
Purchasing management

The purchasing department is a key element in maintaining the economic balance of a company. Therefore, it is important to have an ERP that gives you a competitive advantage when managing the purchase/sale of materials and services, and that drives the optimization of the supply chain. These would be the basic functionalities of an ERP, within the module for purchasing management:
  • Procurement
  • Purchase line discounting
  • Purchase order management (purchase order, delivery note, invoice)
Supplier management

In addition to these five areas, there are some management software that have a CRM tool, but a good ERP should have an independent and fully integrated CRM, so that you can ensure the proper management of customer relationships, that is, to help you understand and manage the needs of your customers.

Sales management

Having this functionality is very important when it comes to monitoring and planning all the commercial activity of the business. An ERP program with sales management functionality helps to optimize the sales process of an organization.
  • Appointment generation
  • Lead and contact management
  • Sales invoicing (quotation, order, delivery note, invoice)
  • Fee management
  • Payment processing
  • Purchasing and sales reporting
Logistics control

Another of the basic functionalities or modules of an ERP system are those oriented to manage the logistics area of an organization, keeping control of the entire supply chain from its origin to the final consumer (procurement, production, commercial distribution and after-sales services).
  • Order control
  • Fleet classification, control of consumption per vehicle
  • Tariff and surcharge management
  • Shipment planning
  • Cost analysis
Human Resources Management

Human Resources management is an area with an increasing weight in companies, as it is the link between the mission, vision and values of a company and the employees who work in it. As it is often said, the most important asset of a company is its employees, and it has been proven that businesses that invest in ERP solutions in the HR area see a significant improvement in the effectiveness of their employees.
  • Payroll management
  • Employee portal
  • Recruitment and selection of candidates
  • Talent management
Now that you know the basic functionalities and modules of an ERP, it will be clearer to you which of your business areas need improvement. The important thing is that the ERP you choose is the one that helps you streamline your daily tasks to save time, money and frustration; but above all, the most important thing is that it gives you the boost you need to achieve your business goals by making the right decisions at the right time.

Apart from the above, from we recommend you to bet on an ERP manufacturer that has a long history and with security guarantees (there are many companies that have ended up implementing an ERP that does not bring them anything; as they say, cheap is expensive).

If you still have doubts, we recommend you to read the post in which we talk about the steps to follow to choose an ERP. Remember that you can contact us for any type of consultation, we will be happy to help you!