Four Ways Cloud ERP Small Business Software Increases Net Profits

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Cloud ERP small business software refers to enterprise resource planning (ERP) software. These platforms pack multiple critical business functions into one powerhouse. They reduce reliance on spreadsheets, and thereby improve productivity, efficiency, and accuracy. Perhaps more importantly, they enable greater visibility into all aspects of a company’s business operations, improve data access, and thereby enhance decision making.

One benefit of adopting a cloud-based ERP system may not be immediately apparent: higher net profits. To increase net profits, business must either increase gross sales or decrease costs (or do both for higher profits). When companies switch to using an ERP system, they can better control costs, thus lowering the costs in the net profit equation. The result is higher net profits.

Here are four ways in which cloud ERP small business software can increase net profits.

  1. Great Efficiency from Cloud ERP Small Business Software

Imagine the typical business, let’s say a manufacturer. Manufacturers face many critical challenges post-pandemic. Tight supply chains and an even tighter labor market have forced them to spend more on raw goods and labor, thus increasing costs. Raising prices isn’t always the answer, especially when customers have seen far too many cost increases over the past several months.

Instead, one way to improve profitability without increasing prices is through greater efficiency. That’s where cloud ERP small business software comes into the picture.

With cloud-based ERP small business systems, companies can automate many manual processes. For example, instead of relying on multiple spreadsheets to track inventory, sales, accounting and operational costs, firms using ERP systems now have data flowing seamlessly into a cloud-based system. This eliminates the need to manually rekey information, print data and retype it into yet more spreadsheets, or manage data to produce graphs, charts, and reports. All these functions are now completed easily by the ERP system.

  1. Reduced Labor Costs

With improved efficiency comes the ability to reduce labor costs. An ERP can reduce the amount of time that skilled workers spend typing data into spreadsheets. Accounting staff members, for example, can then focus on critical tasks, working directly with managers, and providing leadership throughout the company. Other departments may also see time saved and the ability to reduce workforce needs through the efficiency of an ERP system.

  1. Savings on IT Resources

Another way in which adopting cloud ERP small business systems saves money is by reducing the need for IT resources, both workforce and hardware. On-premises systems require a significant investment in hardware, infrastructure, and personnel to manage them. IT security costs are also higher since the business is responsible for data security and backups.

With cloud systems, backups and IT security are typically part of the cloud provider’s package. There’s no need to invest in special hardware since any internet-enabled device can connect to a cloud system via a web browser. And IT support isn’t required for cloud-based systems; the ERP software vendor provides all the necessary support, including updates and upgrades.

These savings can be tremendous and significantly improve a company’s bottom line by reducing costs.

  1. Lower COGS

Cost of goods sold (COGS) can also be lowered using an ERP system. Adding a warehouse and inventory module to an ERP, including barcode scanning of warehouse inventory, can immediately improve the accuracy of inventory and forecasting. With an accurate stock count, you can save on over-orders or ordering too far in advance of need, which results in excess inventory. You can also manage existing stock more easily.

Ensuring fresh stock, rotating old stock, and phasing old unsold items and returned items are all typical business decisions. With an ERP system that includes warehouse and inventory modules, these steps take minutes, rather than hours, which again reduces COGS. These cost savings lead to the potential for higher net profits.

Ready to Experience the Power of Cloud ERP Small Business Systems?

Emerald TC is an expert consulting firm and both Sage ERP and Acumatica Cloud ERP Partners. We have over 20 years of experience helping companies move from spreadsheets or other systems to ERP platforms and have helped many firms reap countless benefits, including higher profits, from making the move to cloud ERP. Please contact us at (678) 456 – 6919 for a consultation.

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