What Is An ERP System?

ERP is the English abbreviation of Enterprise Resource Planning, it is a management software system that serves the needs of business management, not just a software accounting, purchase or sales.

What is an ERP system

Benefits Of An ERP System

A basic ERP system, includes many functional modules, such as Purchasing, Sales (Sales & Marketing), and Manufacturing, Financial Accounting (Finance distribution, project management, human resources, and payroll.

Typically, companies will purchase small software packages to serve different departments, sales departments using sales software sales, the accounting department will use the accounting software. The use of such software will have the following disadvantages:

  • Asynchronous information in the company
  • Takes time to input user data
  • No timely updating of information between departments
  • Company processes are not standardized

The ERP system was designed to solve the above issues, helping to integrate single software into the same system, using the same for all departments in the enterprise, minimizing the effort and time of users, cost optimization, transparency, and accuracy of information provided to the management of the company.

As I mentioned above, if the current company does not use discrete software but uses ERP, what will happen? Firstly, when the sales department imports the ERP system, the next item is the inventory, all the information will be saved in the order, and make invoices without re-entering. There is no need for the users to re-enter the customer information (just enter the sales department is enough, the accounting department only check whether the information has matched). Customer information will be managed throughout and unified in the company with a code and a unique information, avoid the case of sales to customer A, but invoices for customer B. Also, the users do not need to re-enter the order information twice (on the sales and invoices), only the sales staff enter once, then the accountant inherits this information to issue invoices, recognize the debt and revenue

There is no information error between the two departments because the information is only from one source. At the same time, there is a check between the two departments together

Process step by step clear, sales staff have to order, warehousing finished, it is the new accountant to record the debt, turnover and print VAT invoices. Avoid cases where goods have not yet been warehoused, but have recognized debts, or the goods have been recognized as the turnover but have not received any bad sales invoices.

The above is just a small example of the benefits of ERP, helping you visualize how the use of ERP will benefit business and employees. In fact, the ERP system does more than that, it keeps the information up to date and is updated in a timely manner as it is modeled on the actual online data model on the system at a certain branch, the parent company will immediately update the balance for this transaction.

The Bottom Line

So, in summary, what is an ERP system? ERP is an integrated system of accounting, human resources, sales, purchasing, inventory management, production management and millions of other things aimed at standardizing company processes. Apply centralized and consistent data management throughout the enterprise, helping management make accurate management decisions.

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