Both large and small businesses are always on the lookout for ways to cut operational costs while improving efficiency. Getting more work done for lower costs results in improved profits and business growth.

Therefore, several business concerns implement ERP systems in order to streamline all operations and facilitate effective flow of communication between departments. It enables them to maintain a perfect level of coordination among different processes for achieving operational excellence while delivering superior quality products at a reduced time and cost.

The accuracy and automation offered by an ERP system reduces operational and administrative costs without cutting corners and also allows businesses to improve the management of their operations while giving users the information they need to make quicker & better informed decisions.

However, whenever organizations think of making the ERP purchase decision, cost becomes one of the key factors in determining ERP implementation. Many small size companies consider ERP expensive and unnecessary due to budget constraints. Whereas, on the contrary, an ERP helps organizations save money tremendously in the long run.

Read on to understand why investing in an ERP system might be a good idea to save costs for your business:

1. Initial Cost: The initial investment cost of an ERP system can vary on the needs of the organization. The average cost of investment however is primarily subject to the amount of users, customization and brand. The right ERP solution paves way for greater long term saving, leaving the initial investment nominal in nature.

2. Labour Cost: Organizations have struggled with cutting labour costs for a long time. Regular overtime and inefficiencies in finishing a task creates a significant dent in the company budget. Therefore, implementation of ERP becomes a necessary medium for users to attend to the same matters in the most efficient manner. Apart from this it also helps in utilizing the full potential of employees by eliminating tasks that take up too much time such as coordination. In some cases, ERP implementation can also help companies save up to 20% in labor costs while making employee efficiency go up.

3. Admin Cost: An ERP solution transforms administration functions by integrating all the activities in one robust platform resulting in less wastage of time due to duplication of work and efforts. Hence leading to efficient business processes that costs less than those unintegrated one’s. Moreover, Eazy ERP has a unique functionality of integrating with Tally/QuickBooks (leading accounting softwares worldwide) which saves massive duplication of work and additional training required in other ERP systems.

4. Costs due to taxes: One major issue every company must deal with is filing taxes. This tax filing task can become quite tedious when one has to gather financial information from each department and consolidate it. However, in an ERP system all of this information is collected in one platform facilitating gathering and filing tax much quicker and easier. Moreover, having the entirety of the organization's financial information in one place can reduce costly errors.

5. Inventory cost: Nearly every business considers inventory o be a major expense. An ERP software can help you balance what an organization has in hand with respect to their customer needs reducing any extra inventory sitting around and taking up unnecessary space. Having information regarding the exact numbers in inventory lets a company order supplies on time and eliminates last minute chaos.

6. Material Cost: Production team of a manufacturing facility pays great attention to material management and inventory. However, it is often observed that they order either excessive or insufficient raw materials required for an order. The former leads to wastage of resources while the latter can increase cost of procurement for fulfilling order requirement. To overcome this, an ERP’s material requirement planning module tracks and assess exact material requirement & costs.

7. Reduces Training Costs: Regardless of the industry, cost on training is a large component with equally large costs. Most ERP solutions are equipped with tutorial videos, instruction manuals and training guides which fosters self-guided training to new employees enabling experienced employees to spend more time doing their jobs rather than teaching them.

Therefore, It is safe to say that an ERP can benefit the organization in the long run in terms of saving costs. Businesses can easily get positive returns on their investment in an ERP software gradually. With smoother day to day operations, businesses can maximize their profitability, optimize resource utilization and reduce budget, enabling them to save and invest more on creativity and innovation. Enterprise level software such as Eazy ERP also provides unlimited user license which enables companies to stay on their budget even when their users grow.