top of page
Business District

CMC Insights

Implementing an ERP in three easy steps

ERP (Enterprise Resource Planning) is a fancy term for the technological work horse of your company. Companies such as SAP, NetSuite, and Oracle are household names in this sector. Other, smaller platforms are available too - even within these same companies (SAP Business One).

First and foremost, let's clear something up.

  1. An ERP System is not a financial system even though it can help manage your finances.

  2. An ERP System is not an operational system even though it can manage your supply chain.

  3. An ERP System isn't an HR system even though it can manage staff headcount and payroll.

An ERP System does all of these things and combines it so that you can manage your business more effectively.

The real question is, do you need one?

Step 1 - Determine whether you need an ERP system

Do you need an ERP system? That's first step to implementation, and it depends on the type of business you're running. ERPs can manage supply chains, inventory, financial data (cash, income, expenditure, and balance sheet), human resources and payroll. A good way to determine whether your company needs an ERP system is to determine how you plan to manage your company's data.

If your company is straightforward and you don't need to manage a lot of data, a full ERP system might not be necessary. Financial data can be managed in less powerful software, such as QuickBooks or Sage Intaact. These more simple, but very powerful systems include the basic financial reporting your company needs and can create simple and easy to use operational reports. While these programs are lighter, they still can handle outside vendor integrations from your operational systems, HR, and payroll.

However, if your company has more than just basic financials or has higher level internal control standards, a simple software probably isn't going to work. While some of the simple platforms do offer user access controls and separation of duties, simple platforms will not offer robust supply chain management, financial planning and analysis, or more complicated financial reporting. Choose robust ERP system if your company manages large amount of financial data, customized budgeting, and has implemented strong internal controls.

And yes, most financial systems - whether large ERP or small - can integrate with your Saas platforms and services. So, if you are using software specific to your industry, QuickBooks or Sage can easily compliment your existing processes.

Step 2 - Determine your outputs

Now that you've determined that which type of ERP system is required, map out the ways that you will use this system. Generally, there are four major areas that you need to map out.

  • External financials reporting - Who outside of the company needs to know your financial performance? Investors and banks are usually the first to come to mind, but don't forget taxes! Many higher quality ERP systems come with modules built in for many tax jurisdictions, but determine what types of numbers you'll need to report (income streams, non-cash income, cash) and how that information is presented.

  • Internal MIS and budgeting - How does your company run itself? Are there separate departments with different budget areas? How does the company attribute shared costs (e.g. Finance, HR, Legal, building, equipment)? What types of users need these reports and what information will they be privy to?

  • Supply chain - In a goods based industry, this could be inventory or materials used to build new products and their storage. In a service based industry, your supply chain is staff and their associated costs. You may have staff working in different offices, from home, or in a hybrid model, and your ERP system can be configured to apply those costs to those areas.

  • Approvals - It's important to delegate, and a good ERP system supports delegation of authority. Who do you expect to approve transactions and journal entries? Are there certain vendors or customer types and values that certain managers need to review and approve? Map this out.

Once you've determined your outputs, you can now determine what your actual needs are. Not all ERP systems are created equal. While they are all database systems, their user experiences and master data tend to be different, and the costs of customization can vary. By having a clear list of needs, you don't need to worry about selecting the wrong ERP system.

Step 3 - Procure and implement

Now, you can reach out to ERP providers and determine what fits your budget. Make a decision, it should be easy! The work was already done.

To implement, take your outputs and map them to the master data fields within your selected ERP System. A few test transactions will confirm that they're appearing correctly in your financial reports. You can delete (or reverse) these test transactions and process all opening balances and financial data. Pay attention to fields which you want as mandatory so that no transaction is posted without the correct master data.

Seems like a lot? At Advancing to IPO we specialize in ERP implementation confirming that your financial reports are prepared correctly, your processes are sound, and that user access and separation of duties is well controlled. If you're considering a new ERP system, contact us today!


Recent Posts

See All


bottom of page