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Effective cash flow management is integral to the success of a wholesale or light manufacturing enterprise. Cash flow problems in a business can quickly lead to financial instability and, even worse, bankruptcy.
Historically, many manufacturing organizations have been able to grow with manual systems or implement multiple applications. But over time, with evolving manufacturing industry, these traditional systems inhibit an organization’s ability to grow. Managing a manufacturing enterprise with multiple systems and databases can directly impact businesses’ ability to generate accurate reports, manage inventory and billing processes, produce accurate forecasts, cash flow management, and more.
To remain competitive in today’s just-in-time supply chain management environment, manufacturing companies must find an efficient way to manage cash flow. One way to accomplish it is with the ERP for Manufacturing Industry.
This article discusses how ERP software can improve a manufacturing unit’s cash flow.
- Generating Invoices Automatically
When a manufacturing facility manages its invoices manually, it leads to a significant time gap between service delivery and billing. On connecting your service technicians with a manufacturing industry-specific ERP platform via their mobile devices, you can bill your customers before the technician even leaves the customer’s premises.
Moreover, managers need not wait for the next billing cycle to transmit invoices to customers or clients. With an ERP platform, you can forget about monthly, bi-weekly, and even weekly billing cycles and shift to the on-demand billing system. These technologically advanced systems allow companies to bill the customer right after the end products are shipped.
- Overdue Invoices Management
By integrating an ERP system in your manufacturing facility, you can check your invoices and determine which ones are overdue. It is possible as all business information and receivables are stored in a single centralized location. The high-performance ERP software is equipped with a user-friendly dashboard, making it easier to see what’s going on which your company’s funds.
An ERP application lets you easily determine which invoices are open and dated. Moreover, you just need a glance to monitor the frequency of payments and extensive information on payment collection efforts.
With an implemented ERP system, a manufacturing enterprise can grow without hiring additional employees. For instance, your employees will no longer have to reach out to many clients for payments with the ERP software automating the collection process and sending reminders to past-due accounts. In addition, you can set predefined rules for operations to ensure that your manufacturing business is running optimally without incurring additional labor costs.
- Monitor Current and Future Cash Flow
With an ERP system for a manufacturing company, you can have better insight into your cash position via the consolidated data it delivers, enabling accounting or finance managers to monitor the company’s current and future cash flow. Once you have all the information about your organization’s cash position, you will find it easier to plan for the future and take proactive steps for managing your receipts and payments.
Making smart decisions across the manufacturing businesses becomes a breeze with ERP making everything transparent and easily accessible. From inventory, production, and marketing to customer credit limits, payment terms, and discounts, you can turn the margins into cash and reduce costs with an ERP application.
Visibility is a critical component when it comes to inventory management. A manufacturing industry-specific ERP system provides real-time inventory updates, enabling businesses to have control over purchasing. Moreover, you can easily determine the best time to restock via purchasing and planning reports, along with online inquiries. Efficient inventory planning allows managers to manage inventory efficiently and avoid accidentally creating a surplus.
To wrap it all up!
Businesses need efficient cash flow to pay bills, make investments, and cover many other expenses. Companies with low or non-existent cash flow struggle to survive in the competitive market. When it comes to manufacturing business cash flow, knowing and understanding all aspects of cash flow management is as crucial for small companies as it is for large-scale corporations.
And the most effective way to optimize the cash flow in your manufacturing unit is by installing an industry-based ERP system. These robust platforms help businesses collect and connect all important data and provide the necessary functionalities to improve cash flow management.
Eresource ERP is one of best ERP software in india. We offers manufacturing, construction, process manufacturing, transportation, trading and distribution ERP software at affordable prices.
