ERP in short: from order to payment
Today, the order comes in by e-mail. The sales rep copies it into Excel, the warehouse checks stock on paper, production hears about it by phone, and the accountant issues the invoice the next day, once someone sends her the delivery note. At the end of the month, nobody knows exactly how much the company made on each order.
An ERP puts all these pieces into the same program. ERP stands for Enterprise Resource Planning, that is, planning the company's resources. In practice, it is the system in which the order, stock, procurement, production, delivery, invoice and payment are connected. When one person takes a step, the next person immediately sees what they have to do.
What ERP means for an SME
What ERP means in practice depends on the size of the company. For an SME, it means three things:
- Data is entered only once. The order entered by the sales rep reaches the warehouse, production and invoicing without being copied.
- You see the company on one screen. Orders in progress, stock below minimum, unpaid invoices, scheduled deliveries.
- You find out the real profit. Costs add up per order, per customer or per project, instead of being estimated at the end of the year.
What an ERP looks like in your day
For example, a company that sells and installs equipment receives an order for 40 units. In the ERP built by Veziv, its route looks like this:
Quote
The sales rep makes the quote in the ERP and sends it to the customer from the application.
Confirmation
The customer confirms the order through a link. If they have overdue invoices above their credit limit, the order is put on hold until someone releases it.
Stock and procurement
The program sees what is missing from stock and proposes orders to the cheapest supplier.
Production or assembly
Whatever gets made receives a recipe, reserved materials and tasks for people.
Delivery note and delivery
The delivery note is generated from the order and goes out by e-mail. The delivery appears in the day's calendar.
Invoice and payment
The invoice is linked to the delivery note, and the bank statement matches itself against the open invoices.
At the end, the order has a real cost: materials, labour, transport. You see it by cost centre and in the reports.
What an ERP system connects in your company
Every company has a different combination. The most requested modules in Veziv projects are:
- Sales and commercial documents: orders, delivery notes, proforma invoices, credit control, profit per sales rep.
- Procurement and stock: stock by warehouse and location, NIR (goods received note), barcode labels, stocktaking, minimum stock alerts.
- Production: recipes, batches, material consumption, the cost of each product.
- Finance and accounting: invoices, e-Factura (Romania's national e-invoicing system) downloaded automatically from SPV (the tax authority's online portal), the link to SAGA, NextUp, SmartBill or FGO.
- Payments and banking: statements fetched automatically and matched with invoices, overdue amounts, payment reminders.
- Fleet and machinery: vehicle papers, expiry alerts for RCA (third-party liability) and ITP (roadworthiness test), GPS, fuel.
The full list of connections to other programs is on the integrations and automation page.
ERP, CRM and the accounting program
The three are often confused. The accounting program keeps the tax records: trial balance, returns, ledgers. The CRM handles the relationship with customers up to the sale (read what CRM means). The ERP handles everything that happens after the customer has said yes.
In the Veziv ERP, the accountant's program remains the source for items, partners and tax invoices. Syncing works both ways, with a confirmation screen before the incoming data enters the ERP. The accountant does not change the program she works in.
When a company needs an ERP
The signs usually show up in the same order:
- the same thing is written down two or three times, in Excel, in e-mail and in the invoicing program;
- you do not know the real stock without calling the warehouse;
- deliveries or invoices get lost between people;
- you find out an order made a loss only after the month has closed.
If you recognise two of them, an ERP will help. You do not have to start with everything. Many clients start with sales and stock, then add production or the fleet.
Where to start
The first step is to write down how an order travels through your company today, from request to payment. With that sketch we design the system, and the steps are described in building a CRM, ERP or mobile app from scratch. Two ERPs we delivered, for very different companies, are in ERP examples, and the rest on our projects.
Want to see the ERP on an example from your industry? Write to us and we will give you a demo.