Financial management is more than just keeping accounting records. Financial management is an important part of organizational management and can not be seen as a separate task and left alone.
Financial management also involves planning, organizing, controlling, and monitoring financial resources to achieve organizational goals. You can only get effective financial management if you have good organizational planning as well.
Planning in this context means having goals, developing and evaluating approved policies, strategies, tactics and actions to achieve organizational goals.
Good financial management will involve you on long-term strategy planning and short-term operating planning. This financial planning should be part of the ongoing planning process.
Financial management also involves planning, organizing, controlling, and monitoring financial resources to achieve organizational goals. You can only get effective financial management if you have good organizational planning as well.
Planning in this context means having goals, developing and evaluating approved policies, strategies, tactics and actions to achieve organizational goals.
Good financial management will involve you on long-term strategy planning and short-term operating planning. This financial planning should be part of the ongoing planning process.
The advantages of sound financial management
Good financial management will help your organization to- Use resources effectively and efficiently
- Achieving goals and fulfilling commitments to stakeholders
- Be more accountable to investors and other stakeholders
- Gain the respect and trust of various institutions, partners and beneficiaries,
- Benefit in competition
- Preparing for financial sustainability in the long term
What can make financial management work well?
There are four components to making good financial management- Clear financial strategy
- Planning to generate income
- Financial management system
- Appropriate internal environment
Financial management system
There is no model of financial management system that is suitable for all organizations, but there are some basic things that must be considered in order to achieve good financial management practices. It will be helpful to identify certain principles when developing a financial management system. This can be a guide for you when making decisionsThis is The Basic Of Financial Management You Should Know
Every part of the business is greatly influenced by inventory management process. This process interacts with your suppliers as well as other businesses in the supply chain. Moreover, this process also affects your customer service, ability to meet the needs, and also quality post sales.
In addition, inventory management systems also affect the operational efficiency of the warehouse where it has important factors in achieving profit and cash flow.
Inventory management software has an important role as a central database and control system related to Point of Sales (POS) systems, coordinating ordering, flow and audit of stock levels across all business areas.
In a fast market movement where one-click ordering and fast delivery has become a standard, your inventory management system should have some of the following criteria:
In addition, inventory management systems also affect the operational efficiency of the warehouse where it has important factors in achieving profit and cash flow.
Inventory management software has an important role as a central database and control system related to Point of Sales (POS) systems, coordinating ordering, flow and audit of stock levels across all business areas.
In a fast market movement where one-click ordering and fast delivery has become a standard, your inventory management system should have some of the following criteria:
- Scalable- able to handle business growth and development
- Able to process large volumes of data
- Able to provide fast and accurate data to all retail outlets in real time
- Easy to learn by everyone including your point of sales employees.
Making Better Business Decisions
Data generated quickly and real time in all business areas including point of sales encourages better decisions. With the features of reporting will help you in seeing in detail about the products purchased by your customers. With internal business intelligence in inventory management, POS systems and other retail processes, it enables you to actively solve existing business problems.Increase profitability and financial flows
If you have a large business with multiple warehouses and retail outlets your choice in choosing an inventory management system will be crucial. You can get the right amount of inventory to meet the needs while decreasing the amount of goods that have slow movement in your warehouse.Increase customer satisfaction level
Real-time inventory controls allow you to store the stock that customers need. That way you will have no problem managing or processing your inventory inventory because all of these things can be handled easily.Benefits You Can Get From Inventory Management System
Warehouse management system is a set of computer programs that are designed to help distributors perform warehouse operations efficiently with few possible errors. This is the key for the supply chain in order to easily control various processes such as shipping and receiving goods, storage, movement and pickup.
The purpose of the warehouse management system itself is to provide information needed for management to be able to control the movement in the warehouse effectively and efficiently. The warehouse management system is designed to combine hardware and software on a computer to manage inventory, labor and equipment in warehouses and distribution.
By implementing a warehouse management system, you can reduce labor costs, improve customer service and improve inventory accuracy as it allows you to manage inventory in real-time.
There are 2 key elements to an effective warehouse management system
Warehouse management system is very profitable for the company because it can provide 99% inventory accuracy so you do not have to worry anymore about the availability of stock items in the warehouse. That way you can reduce the costs that need to be spent
The purpose of the warehouse management system itself is to provide information needed for management to be able to control the movement in the warehouse effectively and efficiently. The warehouse management system is designed to combine hardware and software on a computer to manage inventory, labor and equipment in warehouses and distribution.
By implementing a warehouse management system, you can reduce labor costs, improve customer service and improve inventory accuracy as it allows you to manage inventory in real-time.
There are 2 key elements to an effective warehouse management system
- Use of portable computers to record work performance in real time
- The use of Barcodes in real time allows the computer to track the work done.
Warehouse management system is very profitable for the company because it can provide 99% inventory accuracy so you do not have to worry anymore about the availability of stock items in the warehouse. That way you can reduce the costs that need to be spent
2 Key Elements of Warehouse Management System
Inventory management is all about knowing what you have in your warehouse and where your inventory is. But if not integrated with your back-office system, simply relying on inventory management systems alone can not effectively optimize your inventory, or ensure the value of inventory assets in your financial statements matches what is in the physical stock - at least not without intervention and reconciliation Manually.
To optimize inventory management, leading companies usually integrate their inventory software directly with back-office systems as well as accounting. This integration provides a competitive advantage with the ability to plan effectively and minimize the costs and possible errors associated with manual reconciliation.
To put it simply, with erp software, your inventory management can change to the better. And to determine the right inventory management system for a business and a strategy to integrate it into the back-office will require an assessment of your business needs and your plans for the future growth.
To achieve the maximum benefits, your system must be able to give real-time report, flexible and transparent.
Optimize inventory to meet product availability and ROI goals
Provide inventory a visibility to supply the supply chain
Stating inventory accurately in financial statements
While there are other benefits of inventory integration with back-office systems, they can have a significant impact on your company's bottom line.
Inventory Optimization: Customers want "fresh" products on demand, and investors prefer unregulated work capital in inventory. Balancing these conflicting goals is rather complicated.
Activities such as storage, calculation and reworking inventory bind additional working capital, and potentially reduce the availability of products your customers want. Planning the exact level and amount of inventory requires sales orders, ordering systems and purchase planning to have real-time inventory visibility.
Supply Chain Visibility: Many companies use supply chain partners to manage inventory levels and deliveries to their customers. To be able to do so effectively, the inventory system must be integrated not only with the company's back office system, but also with third-party logistics suppliers and systems (3PL - third-party logistics). By looking at fluctuating corporate inventory levels, suppliers can make sure their products are available in your warehouse or 3PL if your customers need them.
Accurate Financial Statements: Ensuring accurate annual reports and tax returns are vital to investors and governments. Inventory value can be an important part of the asset value that you declared and recorded in your book and must be in accordance with the physical value in your warehouse. The only effective way to ensure financial integrity in your company's reporting goes well is to integrate transactions in your inventory system with your back-office account chart
To optimize inventory management, leading companies usually integrate their inventory software directly with back-office systems as well as accounting. This integration provides a competitive advantage with the ability to plan effectively and minimize the costs and possible errors associated with manual reconciliation.
To put it simply, with erp software, your inventory management can change to the better. And to determine the right inventory management system for a business and a strategy to integrate it into the back-office will require an assessment of your business needs and your plans for the future growth.
To achieve the maximum benefits, your system must be able to give real-time report, flexible and transparent.
Why Integrate Inventory Systems with your back-office?
The three main benefits for integrating your inventory management system with your accounting and back-office systems are: Optimize inventory to meet product availability and ROI goals
Provide inventory a visibility to supply the supply chain
Stating inventory accurately in financial statements
While there are other benefits of inventory integration with back-office systems, they can have a significant impact on your company's bottom line.
Inventory Optimization: Customers want "fresh" products on demand, and investors prefer unregulated work capital in inventory. Balancing these conflicting goals is rather complicated.
Activities such as storage, calculation and reworking inventory bind additional working capital, and potentially reduce the availability of products your customers want. Planning the exact level and amount of inventory requires sales orders, ordering systems and purchase planning to have real-time inventory visibility.
Supply Chain Visibility: Many companies use supply chain partners to manage inventory levels and deliveries to their customers. To be able to do so effectively, the inventory system must be integrated not only with the company's back office system, but also with third-party logistics suppliers and systems (3PL - third-party logistics). By looking at fluctuating corporate inventory levels, suppliers can make sure their products are available in your warehouse or 3PL if your customers need them.
Accurate Financial Statements: Ensuring accurate annual reports and tax returns are vital to investors and governments. Inventory value can be an important part of the asset value that you declared and recorded in your book and must be in accordance with the physical value in your warehouse. The only effective way to ensure financial integrity in your company's reporting goes well is to integrate transactions in your inventory system with your back-office account chart
This Is The Reason Why You Should Integrate Your Inventory Management
The ledger is a collection of accounts from the main account that collects all the transactions that are recorded for the business. When someone reconciles a general ledger, this usually means that every account in the general ledger is being reviewed to ensure that the source document matches the balance shown in each account. The reconciliation process is the same activity shortly before the auditor's arrival for the annual audit, to ensure that the accounting records are in a clean condition.
The account-level reconciliation process usually consists of the following steps:
The account-level reconciliation process usually consists of the following steps:
- Investigate the beginning balance. Match the beginning account balance to final reconciliation details from the previous period. If the amount is not appropriate, investigate the reason for the variant in the previous period. If the account has not been reconciled for some time, it's possible that the error was in some periods ago.
- Investigate the current period. Match the transactions reported in the account within the specified transaction period and adjust as necessary.
- Adjustment of review. Review any adjusting entries recorded in your account within a certain timeframe, and adjust as necessary.
- Reversal of review. Make sure all journal entries that should be reversed in the period have been canceled.
- End the review of the balance. Verify that the final details for the account match the final account balance.
- Summarizing the final balance in all revenue accounts and verifying the total amount has corresponding to the amount of revenue in the income statement.
- Summarize the final balance in all expense accounts and verify that the total amount has corresponded to the total cost in the income statement. This can be done at the level of an individual expense line item in the income statement.
- Summarize all assets, liabilities, and equity and verify that the total amount corresponds to each line item on the balance sheet.
General Ledger Reconcile Process
As the business progresses towards the global direction, the need to handle the multitude of currencies will be something you must do. With the high competition in the global market thanks to the internet, it requires companies to be ready to handle various currencies in various countries. Any organization that handles international markets is expected to face US Dollar and other unavoidable currencies.
When a company wants to buy in any of the goods from the outside, the same currency problems will arise. Therefore, to overcome this, organizations need to adopt a new module that can overcome the problems of international currency. It comes with an ERP module that is exclusively able to deal with an unlimited amount of currency and can easily be integrated with existing ERP modules, then this will be a lifesaver for the company.
When making international transactions, the software must deal with many currencies in the sales and purchase module, therefore taking into account the exchange rate and the gains or losses incurred during the transaction are also worth considering.
One of the main problems faced by organizations dealing with international transactions is the fluctuating currency market. This makes budgeting for international exchange almost impossible. In the accounting aspect, different currencies can be handled in different accounts and hence the necessary provisions must be made to calculate cross-border transactions well.
To deal with fluctuating exchange rates, some companies note the exchange rate with the banks they face. For this, ERP can be useful by forecasting the expected volume of international exchange in each currency based on existing data.
ERPs can also provide currency reports on transactions and how much of their gains or losses due to exchange rate fluctuations on individual countries. This can alert management to increase margins for certain transactions whose deals mostly end in red due to exchange rates.
ERPs that handle many currencies also allow users to take reports about the domestic currency, US Dollar and other major currencies (Pounds, Euro, etc.). This can be useful for marketing departments to easily localize reports based on the location of their new clients.
This can certainly simplify the various tax formulations and import / export associated with international transactions. Companies must choose one country to pay taxes in that currency. This will facilitate the accounting process as well.
Organizations with branches in various locations around the world can benefit greatly from multi-currency ERP modules. It would be easier to consolidate the values stored in different currencies in different locations into a single currency selected by the end user. It can be used to get a share value statement at a given point in time.
With cloud-based ERP solutions, upgrades and additional modules will be easier to adopt because there will be no change in the organization or workflow. Cloud-based ERP only opens new modules to access and automatically connects to existing modules that are international.
All ERP modules can benefit from the multi-currency module, starting sales reports, purchasing, inventory, budgeting, payroll, accounting, and business can get all the advantages of ERP international exchange. All types of organizations can benefit from multi-currency ERP modules. The rest is about how we choose the right ERP software for it all
When a company wants to buy in any of the goods from the outside, the same currency problems will arise. Therefore, to overcome this, organizations need to adopt a new module that can overcome the problems of international currency. It comes with an ERP module that is exclusively able to deal with an unlimited amount of currency and can easily be integrated with existing ERP modules, then this will be a lifesaver for the company.
When making international transactions, the software must deal with many currencies in the sales and purchase module, therefore taking into account the exchange rate and the gains or losses incurred during the transaction are also worth considering.
One of the main problems faced by organizations dealing with international transactions is the fluctuating currency market. This makes budgeting for international exchange almost impossible. In the accounting aspect, different currencies can be handled in different accounts and hence the necessary provisions must be made to calculate cross-border transactions well.
To deal with fluctuating exchange rates, some companies note the exchange rate with the banks they face. For this, ERP can be useful by forecasting the expected volume of international exchange in each currency based on existing data.
ERPs can also provide currency reports on transactions and how much of their gains or losses due to exchange rate fluctuations on individual countries. This can alert management to increase margins for certain transactions whose deals mostly end in red due to exchange rates.
ERPs that handle many currencies also allow users to take reports about the domestic currency, US Dollar and other major currencies (Pounds, Euro, etc.). This can be useful for marketing departments to easily localize reports based on the location of their new clients.
This can certainly simplify the various tax formulations and import / export associated with international transactions. Companies must choose one country to pay taxes in that currency. This will facilitate the accounting process as well.
Organizations with branches in various locations around the world can benefit greatly from multi-currency ERP modules. It would be easier to consolidate the values stored in different currencies in different locations into a single currency selected by the end user. It can be used to get a share value statement at a given point in time.
With cloud-based ERP solutions, upgrades and additional modules will be easier to adopt because there will be no change in the organization or workflow. Cloud-based ERP only opens new modules to access and automatically connects to existing modules that are international.
Which modules benefit from multi-currency?
All ERP modules can benefit from the multi-currency module, starting sales reports, purchasing, inventory, budgeting, payroll, accounting, and business can get all the advantages of ERP international exchange. All types of organizations can benefit from multi-currency ERP modules. The rest is about how we choose the right ERP software for it all
ERP Multi-Currency Makes Your Business Ready For Goes Global
Building a successful business is everyone's dream. Who doesn't want their business become big and success? Dreaming of being able to be a person that begins with nothing and become a successful person who has achievements to be proud of.
More and more stories of successful people makes us want to be able to follow their footsteps. Until finally we start trying to build our own business.
At first, it all looks fine, because building is a process that can be said very easy, but how we manage it or can we manage it is a different story.
That's why business planning is so important. Because when we build a business, we must have a clear vision and target. And the best way to do that is through business planning.
More and more stories of successful people makes us want to be able to follow their footsteps. Until finally we start trying to build our own business.
At first, it all looks fine, because building is a process that can be said very easy, but how we manage it or can we manage it is a different story.
That's why business planning is so important. Because when we build a business, we must have a clear vision and target. And the best way to do that is through business planning.
- Knowing your business needs
Articulating and defining business needs is an activity called corporate analysis that includes the identification and understanding of business objectives.
- Describe clearly how to meet your business needs
In the stage you recognize your business needs, you will also find major problems related to success, challenges, risks or business problems. Discover and find the right solution to those problems.
- Know how unique your business is.
Every business has its own uniqueness. Discover, emphasize and develop your own uniqueness in so it can be use as an advantage for your business.
- Know your team
Who is in your team? What is their role in your business? Know and understand the tasks and roles of every team in your business
- Know your market
Analyze the market conditions of your business, how much and how quick the market is growing and how much potential profit can be gained.
- Know who made your target market
Make sure your marketing strategy is targeted to your target market, otherwise you will waste time, effort and money.
- Design an ideal promotional strategy
Determine how you can reach the market. Gather the data that can help you in making this strategy. For this step, u might need some tools or business intelligence that can help you gather every data from your business like Acumatica Cloud ERP
- Separating income streams
Real income predictions can actually hurt the plan you have created because it often does not meet expectations. But knowing what makes your income is very important.
- How much budget is needed
Determine the budget your business needs to run well and make sure it can be owned.
- Plan for break events
Revenue is very difficult to predict. But by creating several different scenarios and assigning the sales needed to pay for your expenses and then make a profit.
