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Managing expenses with ERP software

Managing expenses with ERP software

Manufacturers often believe it takes too much time and money to implement ERP software. They must first purchase the system, add or install any custom modules and spend months training employees to make the best of these changes. However, the money saved with ERP software far outweighs any initial frustrations. Manufacturers should first understand the benefits of ERP, and then use custom software to target specific areas within their business.

Time management
ERP software lets manufacturers know how all employees – from the sales floor to the shop floor – utilize their time. Business leaders can easily see how long it takes to complete a specific process. They can assign difficult or complicated tasks to the most productive employees and bill clients at adjustable rates based on the skills involved.

ERP systems also reduce the cost of completing payroll itself. A task that originally took several employees hours of labor now takes place on a computer in minutes.

Fewer errors
Manual management techniques lead to more errors than automated ones. It’s easy for employees to miswrite, mistype or misreport information, leading to incorrect orders, time counts and more. Errors are especially cumbersome if they manage to reach a client. Should a customer receive a wrong order or part, it could take days or weeks for the correct one to arrive. Likewise, a client won’t be pleased if there’s a mistake on their bill. Minimizing errors with automatic collection methods keeps customers happy and production moving smoothly.

ERP software automates data entry, often with bar codes. Employees can scan a code on their punch card when they clock in, when they leave work, or anytime they use a piece of equipment. What’s more, bar codes can contain near infinite amounts of information. They can track the current time, the number of items in stock, the names of employees who have used a certain item – anything management needs. This data is collected in an instant, so there’s no back and forth as there is with manual entry. NAV inventory barcoding updates immediately and drastically reduces the amount of time it takes to record and track your materials and products.

Manage inventory
As CIO.com said, your warehouse should be a step in the chain between your supplier and customer, not a storage unit for materials and merchandise. ERP software can identify what sits in your building for long periods of time. The longer these items go unused or unsold, the less they’re worth. CIO.com suggested adjusting the price of these items to reflect their higher costs.

How to make ERP work for you
The best way to use ERP software and bar codes is to identify which areas will benefit the most. Implementing new methods doesn’t happen without certain expenses, and the point of this software is to keep all costs to a minimum. Therefore, you should only automate exactly what you need. Uses for automatic data entry include counting, invoicing, picking, shipping and receiving. Once you’ve identified your business’s needs, work with a vendor to develop custom solutions. ERP isn’t a one-size-fits-all fix, so what works for another manufacturer likely won’t work for you.

Also, businesses should not be tempted to purchase new software before knowing exactly how they plan to use it. Rushing to make such an investment only increases the likelihood you’ll overlook something vital and need to make adjustments down the road.

Keeping expenses to a minimum is a goal of any company. ERP software lets businesses easily identify and reduce unnecessary costs.

Learn more about how barcoding helps your business with the “Keeping the Physical World and the Virtual World in Sync” white paper.

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