Every business owner would agree that an effective cash flow is essential for any organization to run successfully.A domain specific Enterprise Resource Planning (ERP) approach in the ever dynamic construction industry makes your business capable of creating an efficient, effective and a more dependable cash flow.
Whether it’s invoicing, inventory or reporting based on available data, ERP systems help improve the overall well-being of any construction business big or small. Let us explain how:
Timely generation of invoices and clearing the outstanding ones is one of the first steps in maintaining the health of construction cash flows. With an ERP solution, this task becomes much simpler as it is automated. There is no need to wait until the next billing cycle as invoice can be created on-demand as soon as the work is completed. This is helpful because the faster you send the invoice; faster will you get your payment. Furthermore, by putting all your receivables and collection information at one place, an integrated ERP system is also enabled to provide you with a clear report on which invoices are outstanding and why. Knowing this allows you to follow up with the stakeholder concerned and always stay on top of the situation and improve your cash flow as well as customer service.
Most of your business’s capital is in inventory. An ERP system gives you relevant updates and insights to assist in making wise, informed and controlled purchasing. With the help of purchasing and planning reports, you can see what are the items that you need to reorder, which items are not selling and when is the best time to restock. With an efficient inventory planning, you can gain more control over spending and stocking only what you need without creating surplus.
People in the business of construction can benefit immensely from an ERP system as it provides easy access to instant, accurate, real-time reports on cash flow. With these reports, they can obtain data on specific transactions, patterns, and overall fluctuations in the cash flow. These instant reports give snapshots of your business for various benchmarks like budgeted cost vs awarded costs as well as manage fluctuations on a regular basis. Indeed, there’s no better way to understand and take control of your cash flow than with these comprehensive reports.
A construction ERP provides reports on demand that you need for obtaining in-depth insights on the factors causing fluctuations in your cash flow. You can easily pull out the customised data you need to make calculations like construction time estimation and its possible repercussions on the cash flows.
This information gives you the necessary heads-up and allows you to follow up with the right person to improve your customer service and retention. Using an ERP system is the most efficient way of knowing and understanding a business’s cash flow. If you’ve delayed purchasing ERP software because of the cost or because you think your business is too small to need it, you should think again.