Cloud-based ERP: Building future-ready businesses
by Sheila Bilung, ERP Practice Lead at Symatrix
Many businesses face significant challenges in the finance department due to a lack of coordination between HR data and finance data. The risk of inaccurate financial reports is one of the main issues, as discrepancies in HR and Finance data can lead to errors on financial statements. Financial audits are complicated by incomplete or inconsistent information about payroll and benefits. This increases compliance risk.
Without synchronised data it is also more difficult to forecast labour costs and financial performance. The lack of alignment hinders business planning and financial decision-making. It is hard to use payroll data for business strategy without effective data integration because finance teams are unable to gain a holistic understanding of operational costs and use payroll insights to help guide company strategy.
Many organizations use manual reconciliation to reconcile HR and Finance systems. This takes up valuable time and resources. The manual reconciliation not only increases administrative costs, but it also diverts the finance staff from more valuable tasks. Inconsistencies in HR and Finance records could lead to serious compliance risks. These include inaccurate tax filings or breaches of labour laws. Financial reporting errors can also result in fines and legal challenges.
Disconnected systems are a problem from a technological perspective. They make reporting difficult and error prone, especially during audits and compliance checks. When data is outdated or incomplete, it can affect decision-making. Inadequate system integration can also lead to a lack of collaboration between finance and HR, resulting in hiring decisions made without regard for budget constraints. In addition, the cost of maintaining system integration is higher for businesses due to middleware, additional IT resources, and support.
Cloud-based ERP platforms that integrate HR and Finance data can solve many of these problems, improving compliance, streamlining operations and ensuring accurate financial reports. This integration allows finance teams to provide more strategic value by improving data alignment.
Improved HR-Finance coordination
Cloud-based ERP platforms are a single source for employee and financial information. They support real-time data sharing, automated workflows and scalable infrastructure. Payroll and budgeting are automatically updated when HR updates the system (such as changes to benefits or promotions). Manual entry errors are dramatically reduced, allowing HR to focus more on employee satisfaction and engagement.
The ERP calculates taxes, benefits and overtime accurately, allowing for seamless payroll processing. The built-in compliance tools track regulatory requirements automatically, and generate error-free reports to help you avoid penalties. Cloud-based dashboards, analytics, and reporting provide real-time insight into the workforce costs. This allows for better resource allocation, forecasting, and planning. Leaders can see quickly how a decision to increase headcount will affect the budget, and make sure that decisions are aligned with financial goals.
Cloud solutions allow employees and managers to work remotely and access HR and Finance functionalities. This boosts productivity and supports remote work. A single cloud platform supports all aspects of business, and unified licensing is a great way to reduce costs. This reduces total cost of ownership by removing the hefty maintenance and support costs associated with on-premises software.
Cloud ERP providers usually charge per user, which can result in economies when adding multiple modules. Instead of buying a new system for payroll, organisations can enable additional users within the ERP at a lower incremental cost. A single vendor will ensure predictable subscription costs, eliminating surprises caused by fluctuating software licensing fees. Integration licensing costs are greatly reduced because systems interface is seamless.
Ensure data consistency through master data management
Many organisations also adopt Master Data Management to ensure that critical data is consistent between HR, Finance, and other core business functions. This unifying approach reduces the need for extra tools to reconcile data and improves overall data accuracy within cloud-based ERP environments. The vendor is responsible for the maintenance of these systems, as they are hosted on the cloud. Some leading players are continuing to upgrade their products and modernise them over time. Customers can decide when the upgrades will be implemented.
These systems are constantly evolving to meet the needs of emerging business trends, as well as compliance requirements. They offer a future-proof solution that is ready for use when customers are ready to benefit.
Leveraging an unified platform to grow
Many businesses have found that they can reallocate their staff from the maintenance of systems to strategic initiatives over time. Finance teams can rely less heavily on spreadsheets and manual tasks, while HR departments are able to better analyze compensation and retention. This alignment allows leaders to make data-driven, timely decisions that promote both the growth of an organisation and its workforce.
By investing in an ERP cloud solution that unifies data from HR and Finance, companies can benefit from more accurate reporting, improved compliance and cost savings. By enhancing collaboration between the core functions of HR and Finance, companies can better position themselves for growth in the future, while allowing teams to focus more on initiatives that advance their business.
The original version of this article Cloud-based ERP Systems are Solving Finance and HR Misalignment appeared first on Human Resources News.
