Manufacturers & Distributors ARTICLE -
Speed and Accuracy Count
Use automation to boost efficiency and transparency
Target Audience: Manufacturing and Distribution Companies, M&D Industry, Manufacturing Distributors, Marketing Department Employees, Public Relations
Many manufacturers have invested heavily in enterprise resource planning (ERP) systems but left their financial operations to molder in the stone age of manual, paper-based processes. In a world market that demands ever-faster, mistake-free responses, it’s important that manufacturers use automation to improve their administrative processes and their operations.
And in a post-Enron financial world filled with Sarbanes-Oxley reporting requirements and heightened regulatory scrutiny, it’s equally important that all manufacturers — whether public or private — be sure the information they’re providing about their companies will withstand public scrutiny.
Fully integrated financial tools and information can help you achieve both goals.
Go Paperless With E-Invoicing
You can cut the cost of both sending and paying invoices by integrating e-invoicing into your ERP system, which also will allow you to tighten financial controls and create a complete audit trail of where invoices are in the payment process.
According to Financial Executives International, a fully implemented e-invoicing network that allows you to exchange data with buyers and suppliers can eliminate up to 80% of the paper invoices you receive within two years.
As technology advances, it’s becoming easier and more cost efficient for you to implement electronic accounts payable and accounts receivable systems. Web-based solutions virtually eliminate system compatibility issues and don’t require new hardware or software. Reputable providers of such systems maintain stringent security to protect data, and the real-time access to information can be invaluable to your management team in day-to-day operations.
Evaluate Financial Statements
Technology can reduce the risk of errors inherent in manual financial procedures, and Web-based technology can keep your company transparent to those who need to know how you’re doing. Quality software won’t allow the mistakes that even the best finance staff occasionally makes, and posting relevant statements and filings on limited-access Web sites keeps investors and other interested outside parties fully informed at virtually no cost.
Generally accepted accounting principles give you some leeway in creating the balance sheets and income statements you may post, but there are limits to how much you can adjust.
If you make changes to reserves or accrual accounts, for example, evaluate the effect those changes may have on your net income. Similarly, if you decide to use off-balance-sheet financing — which isn’t always a bad thing — for a project, be sure your business statement accurately represents the magnitude of the financing and the reasoning behind it.
Even if your company isn’t publicly traded, have your CPA analyze your financial statements for accuracy. He or she not only can ensure everything is fit for external consumption, but also that you aren’t becoming a victim of fraud. An objective pair of expert eyes often can spot inconsistencies that aren’t obvious to insiders — and knowing that statements will be reviewed may stop potential fraudsters before they start.
Use Technology To Your Advantage
As a manufacturer, you need to have financial information you can rely on and share with lenders and suppliers when necessary. Integrating e-invoicing into your ERP system can improve the speed and accuracy of your financial reporting.
Find out how our M&D accountants can add value to your business. Email us or call us at 1 (888) 875-9770.
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