If you own a consulting firm, a construction firm, or any organization that runs on a project to project basis, you likely know the advantages of employing project accounting ERP at your company. While you may know that ERP has many of the key features you need for project accounting, however, you may not realize exactly how empowering a tool it is for budgeting. Budgeting with project accounting ERP becomes much more reliable and consistent with the right ERP solution.
Consider the three key components in any budget: past year performance, projected revenue, and projected performance.
Your ERP system gives you access to all the data you need to calculate each of those key budget components. Much of the data you get is real-time, actionable data, resulting in budgets that are more realistic and more empowering for your business.
A budget means developing a current, live strategy that will take you into the near or not-so-distant future. If you are using data from last year, you are not really creating an actionable budget.
This is where ERP steps in. ERP gives you access to the live data that matters for your company and your projects right now. What did your project teams spend yesterday or last week? That’s much more valuable data than stagnant data from last year’s spreadsheet. ERP allows you to see at a glance what you’ve spent and what’s left and where it’s all going. It also streamlines expense reports and reimbursements, two things that create the biggest bottlenecks in your budgets and in accounting. With ERP, you can sync your data on a weekly or even daily basis and get data that matters.
Holistic, Complex Reporting
Budgeting with project accounting ERP also gives you an easy way to run reports across your company from project to project. With a project accounting ERP solution, you can access:
- Fiscal year-to-date comparisons for more efficient analysis of revenues and expenses by category or project, so that you can plan and allocate more effectively.
- Dynamic AP and AR reporting for quick and easy review of recurring expenses for easy identification of where any cuts can be made. In terms of accounts receivables, an ERP system can give you a more efficient way to close out outstanding receivables and give you a realistic picture of what to expect from customers next quarter or next year.
ERP integrations also give you an easy way to fill in any blanks in your financial picture. Viewing all of this in one system allows you to focus on detail while also making effective large-scale decisions for your business.
Budgeting Inspiration with ERP
What’s the single most important effect budgeting with project accounting ERP can have on your business? It can help you budget in the first place. Studies have shown that half of small businesses do not even have a projected budget for the year. With the complex data available in ERP and the simplicity of being able to view all that data through a single pane of glass, ERP makes budgeting not only manageable but productive for any business.