ERP systems and financial demands

Few ERP systems offer a product which is simple enough for small companies, yet complex enough to manage multinational corporations with numerous companies and divisions

There are many types of financial entries required, yet not all ERP systems are effective in providing these types of transactions.

Manual entries, for example, must generate either regular or accrual entries (accrual entries represent entries that are preset for reversal in future periods).

There must be automatic correcting entry and manual correcting entry capability as well as standard recurring entries, skeleton recurring entries, formula for cost allocation, and auto offset capabilities.

Some ERP systems do not offer automatic reversing entry and manual reversing entry capability.

Perhaps of greatest importance is the capacity for an unlimited number of budgets.

Budgets must be created from actuals, from other budgets, or by applying multipliers to a group of accounts.

A number of curve smoothing methodologies should be applicable.

Few ERP (enterprise resource planning) systems offer a product which is simple enough for small companies, yet complex enough to manage multinational corporations with numerous companies and divisions.

The accounting modules must offer a complete financial package which is fully integrated with the other enterprise modules.

According to Rebecca Gill, vice-president of Technology Group International, "Few ERP product lines provide an easy to use financial reporter designed to help organisations effortlessly produce financial data direct from the ERP system".

Financial reporters should be able to:.

* Automatically export all selected ERP financial information into Microsoft Excel templates.

* Give users the ability to quickly improve the presentation of financial data and take advantage of all the rich functional capabilities offered within Microsoft Excel.

* Easily filter financial reports by any business segment, such as department, cost centre, division, or company.

* Simplify financial consolidation review and comparisons.

* Provide significant flexibility by allowing users to produce financial reports that span any time period such as a prior reporting period, quarter, or year.

* Allow users to easily sort individual report cells to display period, year to date (YTD), or budget information to compare and contrast actual vs budgeted financial data.

* Allow users to easily sort individual report cells by any General Ledger account number or by a specific range of general ledger accounts.

* Allow users to quickly manipulate large amounts of general ledger data within Microsoft Excel pivot tables.

The demands for an integrated midrange accounting ERP system are as rigorous as those for Fortune 500 companies; finding ERP solutions that provide the same functionality and a viable price point is not a simple solution.

Using the features detailed above creates a checklist of sorts which can be a good starting point to determine the efficacy of any potential new ERP system.

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