Most businesses find integrating enterprise resource planning (ERP) systems with other business apps essential to streamlining operations. This comprehensive guide delves into the fundamentals of ERP integration, exploring its definition, benefits, and integration use cases that drive organizational success.
What is an ERP and How Does It work?
ERP stands for enterprise resource planning. Accounting departments use ERP software to manage day-to-day finance and accounting activities. ERP software aids in the planning, budgeting, forecasting, and reporting of an organization's financial outcomes. ERP software is critical for tracking revenue and expenses.
What are some examples of ERP systems?
There are numerous ERP (Enterprise Resource Planning) systems available in the market, each offering a range of features and functionalities tailored to different business needs. Here are some popular options:
- SAP ERP: SAP offers a suite of ERP solutions designed for businesses of all sizes and industries. SAP ERP provides modules for finance, supply chain management, human capital management, and more.
- Microsoft Dynamics 365: Microsoft offers Dynamics 365 Finance and Operations. This app provides modules for finance, supply chain management, manufacturing, and more.
- NetSuite: NetSuite, owned by Oracle, is a cloud-based ERP system that caters to businesses of all sizes. NetSuite offers modules for financial management, CRM, e-commerce, and more.
What is ERP integration?
ERP integration automatically syncs data from the ERP across other apps. One of the most popular ERP integrations is with payroll apps. Without data integration, an employee must manually reenter payroll data each pay cycle into the ERP system. Any mistake made during the reentry process results in unbalanced accounts. Manual data reentry requires accounting departments to spend time locating the error and additional time correcting the problem.
When an ERP integrates with payroll, all payroll data automatically shares with the ERP system. Integration eradicates room for human error. Accounting departments no longer spend countless hours correcting payroll data and companies gain confidence that accounts are properly balanced. ERP integration ensures a secure, accurate, and timely accounting process.
What are the Benefits of ERP Integration?
Reduced Errors
ERP integration removes the possibility of human error when manually entering data. The payroll system automatically shares the data entered with the ERP system. Data integration ensures safely shared data across systems and removes the amount of manual errors that accounting departments commonly experience.
Time Savings
Accounting departments save endless hours of valuable time when they do not need to correct payroll errors made or manually enter payroll data across systems. Accountants do not need to spend time locating an error because data integration ensures the errors do not arise to begin with.
“The biggest pluses for us with our ADP to NetSuite integrations [New Hires and Payroll to Journal Entries] are that they save time and eliminate human error in data entry. Before, we needed one person dedicated to manually making changes and updates into NetSuite, which took them about 8 hours per week. Now we’re saving a day’s worth of time every week!” — Iryna Sukhanovska, Corporate Controller, Roostify
Increased Security
ERP integration bolsters data security through reduced human contact. Fewer individuals manage sensitive financial information with data integration. Reducing manual handling enhances security by limiting access points and potential vulnerabilities. With ERP integration, organizations can implement tighter security measures, enforce access controls more effectively, and mitigate the risk of data breaches. ERP integration enhances operational efficiency and strengthens the overall security of the organization.
ERP Integration Use Cases
Integrating payroll with ERP systems is a crucial efficiency booster that saves significant time and money. By automating the transfer of payroll data, this integration eradicates the laborious task of manual, duplicate data entry into the ERP, saving time and mitigating the risk of errors that can prolong accounting processes. Flexspring offers seamless ERP integration services, ushering in a new era of streamlined back-office operations.
Payroll to ERP Journal Entries
Automation serves as a highly efficient bridge, simplifying the intricate task of transferring your payroll data from your payroll application to your ERP system. The payroll to ERP journal entries integration seamlessly imports all payroll-related information into your ERP, effortlessly linking the data. Each payroll run per subsidiary is neatly organized into a single comprehensive journal entry, capturing essential details such as earnings, deductions, taxes, and additional pertinent information. The integration can be tailored to the business's specific needs, allowing you to group summary amounts based on departmental or locational criteria. Integration for an unlimited number of companies, locations, or subsidiaries is possible.
“The ADP payroll to NetSuite journal entry integration by Flexspring delivered exactly what I wanted to do. I looked at more expensive solutions from other companies, but none provided what Flexspring does: a true point-to-point, hands-free solution. We’re no longer in the manual payroll journal entry business. With automation, we’re positioned for substantial, profitable growth without adding any strain or headcount to our back office.” — Jeffrey Laymon, Executive Consultant, Integrated Dermatology
New Hires and Employee Updates from Payroll to ERP
Immediately upon an employee's hiring or updating of information within your payroll application, a seamless synchronization process initiates, ensuring that employee data automatically transmits to your ERP system in near real-time. This synchronization mechanism guarantees that all crucial employee information required for effective workforce management promptly and accurately mirrors between the two platforms.
Any changes or additions to employee records, including personal details, compensation adjustments, or role modifications, seamlessly reflect across your organizational infrastructure without any delay. The new hires and employee updates from payroll to ERP integration enhances operational efficiency and fosters a cohesive and synchronized approach to managing your workforce, facilitating streamlined processes and promoting optimal organizational performance.
Expense Reimbursement from ERP to Payroll
Expense reimbursement from your ERP to payroll integration extends beyond the scope of regular compensations within your ERP system, encompassing all approved expense reimbursements such as travel deductions, mileage, or cell phone expenses. The integration operates by extracting relevant expense data and seamlessly integrating approved expenses into your payroll application. Integration ensures that all authorized reimbursements are accurately accounted for and included in your payroll processing workflow.
Automating this process streamlines the handling of expense reimbursements, eliminating the need for manual data entry and reducing the likelihood of errors. As a result, you can effectively manage and track employee expenses, ensuring timely and accurate reimbursement while enhancing overall payroll efficiency.
Summary
In conclusion, ERP integration offers a transformative solution for businesses seeking to streamline operations and enhance efficiency. ERP integration eliminates manual errors, saves valuable time for accounting departments, and ensures accurate financial processes. Through real-life examples and use cases like payroll journal entries, new hires synchronization, and expense reimbursement automation, it's evident that ERP integration optimizes back-office operations, fostering a more cohesive approach to managing workforce and financial activities. As businesses evolve, embracing ERP integration is imperative for achieving sustainable growth and competitive advantage in today's dynamic market landscape.
