How to automate your checks and balances with ERP
On our blog we discussed how prevalent human error is within businesses and how they are usually wrongly diagnosed. The majority of the time an error, flaw, or mistake was not due to a person, but their environment. But we didn't leave you alone with a problem without a better solution than firing people or revamping entire departments. ERP software.
ERP software doesn't just allow you to locate, terminate, and set preemptive counter measures in place to deal with errors, it also stimulates efficiency and productivity. In this blog, we'll discuss the value of ERP's automation of checks and balances.
Any great business utilizes a system of checks and balances to limit control or access to specific procedures, tools, or decision-making within the company. Just as the United States has its own checks and balances in place to ensure no one government legislation can rule the majority, so it is with businesses.
"Just as the United States has its own checks and balances in place to ensure no one government legislation can rule the majority, so it is with businesses"
We don't place limitations or restrictions for no reason. Compartmentalizing procedures, processes, and even information is crucial to the success of the company. While transparency is good for the entire company to understand the vision and mission, not everyone has a need-to-know, or how I like to put it, need-to-go. So what does this mean for ERP software? How can it help with that? I'm glad you asked.
Let's first take a look at your business or company. How do you place guidelines on what people have access to or can authorize? How many can sign off on budgeting and expenses? Chances are you have very few who have this power. And rightly so.
Businesses stay in business by being smart with their money, resources, people, and their vision toward customers. If everyone had access to the same authority, that would not go well. Hierarchies are necessary within any great organization. It enables people and departments to focus on their task and not worry about parts of the business or market that could overwhelm them and has nothing to do with their responsibilities.
"Checks and balances are put in place to protect you and keep your company running smoothly and ensures everyone follows the same guidelines."
The problem with this though is that it places a huge load onto a select few. Talk about authority overload! Checks and balances are put in place to protect you and keep your company running smoothly and ensures everyone follows the same guidelines. But those same checks and balances could be what's hampering your growth and productivity.
Perhaps you've placed a cap on how much purchasing materials the Marketing Department can buy without exceeding your quarterly budget. Maybe there's a limit to how much credit your employees in Customer Service can extend to clients when they call in for sales orders. All of these are in place to protect you and everyone within the business. But at what cost?
Delayed operations and less efficiency.
Checks and balances are great in theory but they hold everything up. Something simple might take days or weeks before a manager is able to sign off on it and approve a transaction. These requests get lost in the process, held up on manager's desks, or vanish into the ether all of the time. If a department or process can't function to its full capability because of delays, just think what that might be costing you in terms of potential quality, effectiveness, and return of investment.
Some ERP systems have developed a better way—a more perfect solution—Approval Management.
What is approval management?
ERP software can automate your approvals tracking and processing to fit your needs. It's Approval Management allows you to set up approval processes for most of your checks and balances. Sales orders, change orders, purchase orders, vendor invoices, customer invoices—all taken care of on auto pilot. Sound too good to be true? It does but that doesn't mean it's not real.
Your leadership creates the checks and balances that you want to utilize and give users the responsibility to approve those documents before they're finalized. If Approval Management is coupled with a tool such as Document Imaging, it grants managers access to all information they require to pass a sound decision on approvals in a timely manner. It also enables them to dive deeper into these source documents when necessary.
"With Approval Management, you have full control of your company's checks and balances to ensure delays don't hamper your progress"
You can route responsibilities based on salesmen, managers, buyers, vendors, customers, or by a dollar amount. All change orders over $30,000 need reviewed and approved by the regional manager? No problem!
With an Approval Management system wired into your ERP software, you have the power to automate your approval processes. Create approval tiers or assign multiple approvers per tier, the possibilities are endless. You can implement all of these without interrupting your business. One of your managers, or yourself, leaving town for few days on vacation or business? Need someone to take over their responsibilities so nothing gets delayed in the process? Now you can.
Approvers have the ability and option to delegate their authoritative signoff to alternates to handle approvals while they're gone enjoying mojitos on the beach in Belize. Maybe next time we can all go and leave the approval process on auto-pilot. Actually, you can!
With Approval Management, you have full control of your company's checks and balances to ensure delays don't hamper your progress. Best of all—it's all automated! Once the initial setup, you never have to worry about it again. Talk about stress free living!
Featured white papers
70 features to look for in your next ERP
A comprehensive guide to help you identify requirements for your ERP selectionDownload
ERP Software Pricing Guide
Get your comprehensive guide to the cost of ERP softwareDownload
60-Step ERP Selection Checklist
Get the comprehensive checklist for your ERP selection projectDownload
Five great ERP features to engage millennial users
These five features are must-haves for millennial users
ERP vs. HRMS: which should manage your payroll?
Compare the advantages and disadvantages of using HRMS or ERP to manage your payroll
How to justify an ERP upgrade to management
Discover the secrets to pitching an ERP software upgrade to your management or C-level executives.