Many small business owners are reluctant to use new technology. They rely on paper-based, manual systems for key business functions like billing or inventory. They stick to spreadsheets that their businesses have long outgrown. They may rely on a different computer program for each of their business’s functions. Business owners may want to upgrade to an enterprise resource planning (ERP) system, but may be worried about the costs.
Small businesses don’t have large budgets. They need to be sure that any investment in new technology will pay off. Cloud-based ERP systems can offer many financial benefits to small companies, so they’re a smart choice for many businesses.
Here are seven ways that an ERP system can financially benefit your small business.
1. Make Your Company More Efficient
Paper-based systems or spreadsheets aren’t efficient, as many business owners discover as their companies grow. With an ERP system, you can store your business’s information in one place. You can also automate many of your time-consuming business tasks. By increasing your efficiency with one of these systems, you can get more work done.
2. Protect Yourself from Data Loss
Business owners may not think of data loss as a potential cost for their businesses. Data loss is much more than just an annoyance, though. If you lose data—which is easy to do when all your data is stored on paper—you could waste days or weeks trying to recover it.
Some data may not be recoverable, like order data, and your company could lose money. Potentially a lot of money: Data loss costs Canadian firms $16 billion per year. With a cloud-based system, your data is safely stored on the vendor’s servers.
3. Enjoy Lower IT Costs
IT employees are very skilled, so they’re expensive. You may need to pay IT staff to perform upgrades of your computer-based software. If you’re using a lot of different software for your business’s needs, these costs can add up. Cloud-based software updates automatically, so you won’t need as much IT support. This helps your business reduce costs.
4. Track Your Inventory Accurately
It’s hard to accurately track inventory on paper or on spreadsheets. Inventory counts change frequently, and your data may often be outdated. When you rely on outdated data, you could order too much inventory, and tie up money unnecessarily. You could order too little inventory, and miss out on potential sales.
Cloud-based ERP systems can give you real-time inventory data, so you’ll be less likely to make costly ordering mistakes.
5. Identify Your Best Customers
Do you know who your best customers are? When a company grows, it’s hard to keep track of these details. With an ERP system, you can easily pull up every customer’s order history and see who spends the most money.
By identifying your best customers, you can put more effort into keeping them happy. If your best customers don’t feel like VIPs, they may take their business elsewhere, which costs you money.
6. Track Outstanding Invoices
It’s easy to lose track of paper invoices. You may forget to follow up with customers and never receive payment for some of your orders. It’s easy for this to happen when you’re running a busy business.
A cloud-based ERP system will let you easily see outstanding payments. The system can also send automated payment reminders to your customers. When invoices don’t fall through the cracks, your business will receive the payments it’s earned.
7. Access Real-Time Business Data
Have you ever made an important business decision based on a hunch? Many small business owners have done the same. When your data is stored in many different places, it’s hard to access the information you need to make strategic decisions.
Cloud-based ERP systems have real-time business data, so you’ll always have current data to inform your decisions. With good data, it’s easier for you to make informed decisions to help your business grow.