Far too often I hear from employees in financial departments bemoaning the quality of supply chain data available to them to analyse.
What’s usually lacking is an integrated ERP system that effectively spans departments. Many are operating in silos using a patchwork quilt of software solutions or home-grown spreadsheets which require constant manual updating and compiling.
As a qualified accountant now working for a technology consultancy, I have seen the benefits of introducing new software that allows finance professionals to streamline and transform this vital area of finance and operations.
Connecting the dots
From suppliers to the customer and all that’s in between, supply chains naturally become increasingly challenging to manage the more an organisation grows.
Technology has the power to help overcome these complexities across the connections and interdependencies within your specific supply chain. A ‘single source of truth’ can significantly improve resilience, maximise operational efficiencies and increase profitability.
Financial software across supply chain management can also help to prevent common issues becoming amplified so they don’t have knock-on effects across ordering, invoicing, reconciliation, and payment.
This is crucial when you’re faced with supplier performance challenges, forecasting errors and the need to balance inventory management with volatile accounts receivable and accounts payable.
Visibility over the status of the procure-to-pay cycle, working capital, assets and liabilities is also vital to responding appropriately to dynamic factors such as variable supplier payment terms and operating costs.
Modern ERP software such as Microsoft Dynamics 365 Finance and Supply chain can offer a holistic view across departments, allowing you to incorporate real-time supply chain data into your analysis and decision making more easily.
Performance can be improved through a system that:
- Uses standardised forms to simplify key information capture and can be tailored to factor in specific departments’ data, needs and operating models.
- Can provide access through mobile devices so tasks can be performed and data captured remotely (in the warehouse, at the point of delivery etc).
- Enables interoperability with multiple systems over APIs, ensuring data from specialist departmental software can feed into a streamlined, holistic view of operations.
- Utilises RPA (Robotic Process Automation) to drive efficient administration, avoiding time sapping re-keying and checking tasks and lessening the risk of erroneous data input.
- Ensures a flow of data that can be viewed in real time and used to take quick, decisive action either to capitalise on opportunities or avoid potential issues.
- Provides a centralised, secure dashboard that enables an easy snapshot and tracking of key supply chain metrics.
- Can automatically convert data into easy-to-consume reports for management, customers and suppliers.
- Maintains a single, accurate database which can be used to support a wide range of activities including compliance and contractual negotiation.
- Allows for further interrogation of data using Artificial Intelligence (AI) with predictive analytics helping to streamline processes based upon historical data and the trends this data depicts.
- Can support increasing adoption of Internet of Things (IoT)-enabled devices that automatically capture key information across operations.
Financial ERP software as a platform
Many organisations feel trapped by legacy on-premise ERP software which is inflexible and costly to adapt.
With the advent of scalable cloud-based systems such as Microsoft Dynamics 365 Finance, ERP can be more quickly tailored to evolve in line with changes to supply chains and operating models.
Ultimately the flexibility and agility this software provides will be vital as we enter a period of potentially deep economic uncertainty.
Those organisations who can harness data from across their organisation to manage volatility and affect change will likely be better protected and ultimately more competitive.
Richard Baxter is a former Group Financial Controller and qualified Accountant. He is now Financial Applications Director at technology consultancy and certified Microsoft Gold Partner, Tisski.