How to Choose the Right ERP Software for Your Business

To choose the right ERP software, there are a few things you need to have in mind.

You must start by understanding what your companies’ needs are. And then, select the provider which can meet your company’s requirements. The software itself should be user-friendly and customizable.

To be more specific, here are the guidelines you need if you want to choose the right ERP Software for your business.

Understand what you need

This one is already a no-brainer.

The question now is, how to best document your ERP requirements?

The best way to present your ERP needs is through an accounting flowchart like this:

With this flowchart, you will know what accounting activities you will have. ERPs have different kinds of accounting modules. Your company must use only the modules you need in order to reduce costs and complexity of launching.

The accounting flow chart is best done with top executives, led by the head of finance or accounting. If you don’t have at least an accountant yet, you better get one first before you talk with ERP suppliers.

Reliable Vendor

If you want to choose the right ERP software, you need to choose an ERP provider that can support all your needs. They must be able to help you clearly identify the functions you’ll need. Their technical staff should have experience with other companies in order to give you the best accounting solution possible.

There are two types of ERP suppliers that you can get:

First, you can take a vendor where you will only pay for a one-time fee. This option is good with your cash flow because you only need to make one payment. However, you need to ensure that they will still be supporting you through regular software updates and technical hotlines.

Or, you can use ERP software on a monthly subscription basis. This is now the more common option being chosen by business owners.

The advantage of this is that businesses can be ensured with continuous support because they pay monthly.

However, there could be price escalations, and future updates might be paid separately. You will forever pay out cash for the software unless you discontinue using it.

User — Friendly Interface

ERP products often offer a lot of features because they want to cover a wide range of industries. This lack of industry focus sometimes costs their quality.

Some ERPs became too concentrated on the technical, at the expense of having a friendly user interface.

In layman’s terms, an interface is the face of the ERP software. It’s the one composed of buttons, text boxes, windows, etc.

Examine samples given by the ERP provider. There should be at least three things you need to look for in ERP software.

First, there should be no unnecessary buttons, especially those that can destroy the database.

I remember one software I used which has a ‘Red X’ button shown. It’s not useful to us users, but rather, destructive. Why? Because when you push that button, the database will be ruined!

Second, the system should be consistent. Let’s say, for example, you need to extract data from the Accounts Payable (AP) and the Accounts Receivable (AR) modules. If the way to download data from AP is to ‘left click’, the same action should be applicable with AR. If they have different ways of extraction, that puts an unnecessary burden on the users.

Why do inconsistencies happen? Because different IT teams work separately on different modules. They each have their own ways of coding the instructions given to them.

And third, the buttons must be representatives of the functions. For example, if it is a ‘SAVE’ button, then it should use a known icon like a floppy disk.

Well-represented icons will keep the users from being lost.

ERP must be customizable

No ERP fits all businesses. That’s why customization is necessary.

During the early negotiations with the vendor, ask them up to what extent are customizations free. Make sure that all customizations are done during the initial phase. It is during this phase that most requests are done without extra charges.

During implementations phase, all customizations are no longer free.

And this will put us back to our first reminder: being well-prepared by having a documented accounting process.

Usually, the provider’s technical team stays with the company during the first month of implementation. Before the month ends, ensure that the system is already working well.

If after this period your company still needs the vendor’s team, communicate it right away. You might incur additional costs, but, don’t hesitate. It is far more important to have a running and well-functioning ERP rather than keeping some dollars to your bank.

Choose the right ERP Software

Your ERP software will be providing most of the important reports in your company. Treat ERP as a really big investment. You cannot afford to make the mistake of buying the wrong one.

The problem with a lot of companies is that they leave their accountants with choosing and implementing the ERP platform.

BIG MISTAKE.

Picking and running an ERP system is an organization-wide concern.

If you want to choose the right ERP Software, use this guide, and use your whole organization.