9 Ways to Improve Cash Flow with Cloud ERP

Posted on February 3, 2016.

Concept - improve cash flow with cloud ERP Effectively managing cash flow relies on keeping all the moving parts of your organization running smoothly. As the size of your organization and its volume of customers and orders grow, manual processes begin to break down and cash flow is impacted. You can improve cash flow with cloud ERP. In fact, organizations have cut their cycle times in half¹ and realized a 21% increase in profit margins within the first two years² after implementing cloud ERP solutions like Trek Cloud ERP. It’s amazing how much cash flow and profits are impacted by having adequate visibility and insight to your processes and data. To give you a better understanding as to why ERP can improve cash flow, we’ve put together a list of 9 reports, processes and methods made possible by ERP that have a substantial impact on cash flow.

1. Planning Report

ERP systems like Trek Cloud ERP include Inventory Management and Materials Resource Planning (MRP) functionality that makes it easier for purchasing staff to have insight to demand. With a Planning Report, the purchasing staff will know what to buy and how much, regardless of whether the demand is coming from Sales Orders, Work Orders or Replenishment needs. Replenishment can be based on such factors as min/max levels. By coordinating all of this ordering into a single Planning Report, the purchasing staff can better coordinate purchasing, streamline ordering processes, and negotiate better rates based on quantities. These reports will also help prevent missing an order (which would delay fulfillment) and purchasing errors like over-ordering.

2. Late Purchase Order Report

Using this report, your team has insight to what parts or materials haven’t been received yet. Perhaps your vendor forgot to ship an item, or your Receiving Department didn’t “receive” the parts in the system. These are issues that would delay fulfillment (as well as invoicing and payment, hence cash flow is impacted), and so need to be caught quickly.

3. Just in Time Inventory

This method allows for purchasing based on demand. You’ll spend closer to when you need materials so that funds aren’t tied up longer than necessary. Effectively utilizing this method requires a system like an ERP that allows you to easily and accurately monitor requirements across many open orders.

4. Improved Order Fulfillment

Your ERP prompts you to the next step once the necessary inventory is in stock. One method you may use is fulfilling based on pick tickets or wave planning, in which you are pulling stock and shipping the products to fulfill sales orders. Another method may have you pulling parts for work orders based on a Bill of Materials (BOM) that your engineering staff created, and then manufacturing or assembling to satisfy the requirements of the work order. The workflows, communication and visibility to these steps are vastly improved thanks to the automation that is configured in an ERP. With shorter processing time, orders are completed and payments arrive sooner, allowing the company to improve cash flow.

5. Outstanding Sales Order Report

By monitoring an Outstanding Sales Order Report, you can quickly see what open orders are getting close to or are past their due dates, allowing your team to identify and resolve issues more quickly. The faster you can close out sales orders, the sooner you can invoice the customers and get paid.

6. Work Order Status Report

Meeting the requirements of large work orders takes coordination, and the more work orders you have open the more challenging this becomes. A Work Order Status Report helps you track important details across all your open work orders, including their assignment, status and estimated completion. Better tracking and follow-up results in faster completion and payment so you can improve cash flow.

7. Implementing Lean Processes

With an ERP, you are better positioned to implement a lean environment. Look for ways to streamline workflows and processes, reducing the overall time from order to invoice. In fact, a great time to consider Business Process Reengineering is when implementing a new ERP system.

8. Dashboards

Your team members, as ERP system users, can configure their home screen dashboards to display summary data and reports meaningful to their areas of responsibility. Achieving a 21% profit margin increase following ERP implementation happens incrementally across your entire organization as users gain insight and adopt efficiency measures, some of which is informed through daily use of dashboards.

9. Accounting and Financial Reports and Tools

We’ve saved the obvious for last. To monitor and improve cash flow, there are a variety of financial-related reports and system tools in your ERP that are essential. A complete package of standard reports that fits most business needs is provided with a subscription to Trek Cloud ERP. Examples include the Balance Sheet, Income Statement, Cash Flow Statement and Accounts Receivable Aging Report. Many other reports and tools inside the ERP provide you with visibility to the real-time status of your business. All of Trek Cloud ERP’s reports and workflows can be configured to meet your needs, and additional custom reports and processes can be developed to address your unique business requirements.

How to Improve Cash Flow: Next Steps

We would be glad to discuss your unique challenges and how to improve cash flow with Trek Cloud ERP. We’d also be glad to provide your team with a free demo. Please contact us to learn more.

Request a Demo

Inventory Management Secrets: 4 Steps to Implement Today

Managing the Receiving Department for Efficiency and Accuracy

10 Distribution Center Best Practices to Implement

Business Process Reengineering: Its Value and Relationship to ERP