As businesses grow, they often face the challenge of managing increasingly complex operations. One popular solution is to adopt an Enterprise Resource Planning (ERP) system, which centralises data and streamline processes across an organsation. However, for many businesses who already use Xero as their accounting platform, leveraging that software alongside quality third-party plugins can be a much more cost-effective and efficient solution than implementing a full ERP system.
What is an ERP and who needs one?
ERP stands for Enterprise Resource Planning and is a type of software designed to integrate and automate various business processes across a company. It can encompass any number of functions including such areas as project management, resource planning, accounting and taxes, financial reporting, billing and collections, human resources and payroll, procurement, supply chain logistics, procurement and manufacturing, sales, and customer services, to name but a few. Historically server-based and used only by large enterprises, ERPS have become increasingly cloud based and used by smaller companies as well.
Popular ERPs for small but rapidly growing businesses include Oracle Netsuite, Microsoft Dynamics, Workday and Sage Intacct. SAP is another ERP, generally popular with larger businesses or those with very complex specialised needs, particularly in sales and service.
Key features of ERP systems:
- Centralised data management
- Automation of routine tasks and workflows
- Scalability
- Comprehensive reporting
Who needs an ERP?
For most small and medium sized businesses, the time, cost and effort of implementing an ERP far outweigh the benefits. This is because, to get the benefit of the ERP, it is necessary to move all existing data and processes to the new system and to ensure that the data is transferred seamlessly such that there is one, fully integrated version of the truth across the business. However, for some very large businesses with complex sales and supply chain operations that materially benefit from real time communication between regions and functions, the investment is well worth the effort.
Using Xero as your ERP
Xero is an accounting platform, not an ERP. That said, Xero integrates seamlessly with a number of specialist automation platforms which allow you to automate your business and get all the benefits of an ERP without the high cost of investment and business disruption. With Xero plugins, you can grow your software to match your evolving business needs.
Benefits of using Xero as your ERP hub
Using Xero instead of investing in a new ERP system has the following benefits:
- Relatively inexpensive
- Quick and easy to implement
- Does not require full overhaul of existing business processes and systems
- Flexible
- Does not lock you in to a single provider for all future investment in software solutions and related support
ScaleXP as a key provider of extended Xero functionality
ScaleXP is a 5-star Xero plug-in partner which specifically adds the following capabilities to the Xero accounting platform:
- automated revenue recognition
- automated prepaid expenses
- billing from Hubspot
- contract and renewals management
- automated KPIs with particular depth in SaaS KPIs and subscription metrics
- automated financial reporting and management dashboards
