Three direct links between ERP and manufacturing revenue

A lot of people look on ERP systems as merely an accounting system or a tool to track transactions. Well, it is all that and more. ERP will help improve manufacturing revenue too, if you have the know-how. Here’s what to focus on:

1. Production scheduling

You don’t get paid for a sale until you can deliver it. The next sale might never come about if you don’t deliver on time. Every manufacturing ERP includes production scheduling, but this tool is often underused. Your customers tell us when they want their order delivered - enter that date in your ERP sales orders module. The scheduling system will use that date to help plan production and purchasing to meet the customer’s expectation.

Recommended reading: find out how ERP software could increase your company’s profits with our step-by-step guide to calculating ERP ROI.

If you find that are you unable to meet the occasional deadline, your manufacturing ERP system can then alert you well in advance so you have an opportunity to communicate with customers and give them a chance to rearrange their demands. Scheduling also helps coordinate the work for every customer so that this doesn’t happen.

2. Revenue recognition

Sometimes revenue really is a function of your ERP system, as manufacturing ERPs also include the accounting tools you need. If your sales include a mix of manufactured product sales along with service, you can fine-tune the date we recognize the service sale while still observing your GAAP rules.

The product you manufacture might be sold as a subscription rather than a single delivery against a customer order. GAAP allows you to recognize the subscription string at once or to defer some revenue. You can use the accounting configuration setup to give us the accounting results you want to see and statements that will meet the requirements of all our stakeholders.

3. Business intelligence

Your manufacturing ERP also includes many tools to capture and analyze business and help improve future sales. Looking at past sales streams can help identify seasonality for some products and customers. You can then can include those peaks in your master production schedule and avoid losing out on peak revenues.

We might also see that revenue for some products or customers is decreasing while others are increasing. We can now shift our resources away from the declines toward the increasing revenue. Our BI also can analyze our internal data along with external data to help find markets we could service in the future.

All these tools are included as standard with most manufacturing ERPs. Furthermore, many can provide some very sophisticated optional tools if needed. For example, all ERP systems will have production scheduling but if you need more specific functionalities then there are advanced systems that add capabilities to resources and priority to certain customers’ orders.