Any business, regardless of its size or annual revenue, needs some tools to manage its business operations. However, ERP ( Enterprise Resource Planning) software is one of them. Although large business enterprises and industries must have an ERP system to manage and simplify their operations. Small and growing businesses also greatly benefit from ERP features to meet their functional needs.
Do you know that the global market for ERP has increased by 8% over the past 3 years? It means that all sizes of businesses are adopting ERP software for their workflow and management. Moreover, according to Gartner, the global ERP software market is expected to reach $63.6 billion by 2025. Many small and medium-sized businesses start using it to manage daily tasks efficiently.
In this blog, we will explore ERP for small businesses, its key features, and the challenges SMBs are facing in the implementation of the software.
Let’s start!
What is ERP for Small Businesses?
ERP stands for Enterprise Resource Planning. It is a type of software that helps businesses manage and automate their processes in one system. Instead of using different tools for inventory, finance, CRM, HR, or other areas, an ERP system brings everything together in one platform, so the business manages its processes smoothly and efficiently.
ERP for small businesses is a smart assistant that helps in tracking sales, inventory, finances, customers, and employees, without using five different apps or spreadsheets. It helps in eliminating information barriers, streamlining workflow and operations, decision-making, and ultimately supports business growth.
Are you thinking about how ERP helps small businesses in day-to-day management?
Here are the key features of the ERP System that help SMBs.
Features of ERP for Small Businesses
From managing sales to tracking inventory, here are the features small businesses can benefit from.
1. Human Resources & Payroll
ERP software manages essential employee data, time tracking, and salaries as well. It simplifies payroll and avoids errors. It removes the need for separate software for HR tasks.
2. Financial Management
Modern ERP software goes beyond basic bookkeeping. It manages cash flow, expenses, and profits. Further, it also helps in managing billing, taxes, and generating comprehensive financial reports. However, ERP software makes the finances and accounting of small businesses easy to use.
3. Customer Relationship Management
Basic CRM abilities include contact management, sales tracking, and service history. Integrating ERP prevents costly errors and builds a strong customer relationship.
4. Reporting and Analytics
Smart ERP provides automatic reports on sales, performance, profits, and more. These insights help small businesses make smarter decisions for better growth. Moreover, small teams examine the data without writing complex reports. It eliminates the maximum manual work.
5. Supply Chain Management
Supply chain management includes automated reordering points, basic demand planning, and supplier performance tracking. These features of ERP help optimize costs and maintain stock levels.
6. Sales and Purchase Management
ERP helps small businesses track sales orders, invoices, and customer payments. Moreover, it also manages purchases, supplier details, and inventory. However, it keeps everything organized and reduces manual work.
7. Inventory Management
Real-time tracking and multi-location support are very important. ERP software can help small businesses avoid running out of stock, organize storage, and use barcode scanning. With the right inventory tools, they can cut inventory costs by 20% to 30%.
8. Mobile Access
Remote access to the business function is no longer optional in this digital era. Many ERP systems have mobile apps. You can check business updates, approve orders, or send invoices on the go. This is perfect for business owners who travel or work remotely.
The right software solution brings all these features in one platform, tailored to your business needs. Now, let’s look at the challenges and opportunities that small businesses encounter in the implementation of the ERP system.
Challenges and Opportunities for Small Businesses
As you know, the main purpose of ERP systems is to help small businesses work efficiently. It also has difficulties and opportunities for growth. Let’s look at both the challenges and the opportunities.
1. Misconception About ERP Cost and Flexibility
Small businesses face the limitation of budget and resources. They think ERP systems are too expensive. But that’s not true. ERPs for small businesses are flexible and expand with the company. As your business grows, you can easily add new features or tools instead of an entire system.
2. Small Teams and Limited Time
With small teams, businesses often struggle to manage daily tasks, serve customers, and grow their business. It is crucial to follow rules and regulations, which take time and money. Moreover, simple tasks such as typing data or analyzing reports can slow things down even more.
3. Lack of Technical Knowledge
Small business teams lack IT expertise. They might feel overwhelmed while learning a new setup and software. However, modern ERP software is user-friendly with simple dashboards and support services. Many vendors offer training programs, so a non-technical person can quickly learn how to use the ERP solution.
4. Data Security Concerns
Some small businesses are concerned about storing their important data in one system, especially if it’s online. Most ERP providers use top-level security, including data encryption, regular backups, and controls. It keeps data safe and protected from cyber threats.
If small businesses overcome the mentioned challenges and implement an ERP system to manage their task, they can benefit from improved efficiency, better decision-making, and smoother daily operations.
Benefits of ERP for Small Businesses
According to Gartner (2023), companies that implement ERP can improve their work speed by up to 20% and cut their costs by 15% in the first year.
ERP systems help small businesses work efficiently by keeping all data in one place, saving accurate records, and adding strong security. This makes daily tasks easier and reduces errors. ERP also helps with managing risks and meeting financial rules. It has features such as automated audit trails that track every step. Further, it gives peace of mind.
With tools for real-time data and smart reports, ERP helps businesses make better decisions, find new chances to grow, and improve their overall performance. If ERP tools don’t fit your needs, a custom software solution can be built to match your business requirements.
Looking for an ERP Solution for Your Businesses?
If you are looking for the best ERP small business software, you are in the right place. Sumato ERP is a smart solution designed for small and growing businesses. You can manage sales and inventory, finance, HR, and reporting. Our expert team ensures smooth setup, support, and customization, so you can focus on running your business instead of managing spreadsheets.
