Making The Numbers Add Up
There are strong arguments for accounting information to be visible within MRP, but should you select a manufacturing system for your business purely because of its financial capabilities?
Most departments will be affected by a new MRP/ERP system, so ensure that it meets the needs of all and involve each department manager in the selection process. However, it’s not clear-cut, with many common pitfalls:
The blinkered consultant
External consultants often focus on finance and may not understand other departments’ needs. One existing 123insight user was told by a consultant to replace it with an ERP system with integrated accounts, which ‘would take them to the next level’. One year on and £100,000 later the system still wasn’t working. They returned to 123insight, adding an interface to Sage 50 accounts. They could only do this because of 123insight’s low monthly subscription.
The safe bet
Several companies best known for their accounting products also offer manufacturing software. Just because a brand may be a market-leader in one sector it doesn’t follow that they will be strong in another.
The imposed system
During an acquisition the parent company may impose their own accounts or manufacturing systems. Businesses often fail after acquisition – not because enough investment wasn’t made or that they was failing anyway, but because they was forced to implement a system that simply could not deliver.
There is often tension between Finance and other departments when implementing a manufacturing system, as the financial aspect is seen as more important. With many systems being accounts-led there is a risk that Finance will see it as a cure to all their problems and assume the same for everyone.
What does ‘integrated accounts’ mean?
Usually, a vendor that has an MRP/ERP system with accounts as part of the product brand will refer to it as ‘integrated’. It may be that the product grew over time, often through acquisition, to include other features, with many horror stories of disjointed interfaces and problems with functionality. ‘Integration’ does not have to be between two products from the same supplier. Many systems – both MRP and accounts – are designed to allow simple and easy data exchange.
What ‘integration’ do I really need?
Sales/purchasing departments need credit limits, accounts on stop, outstanding invoices and payments made for customers and suppliers. Staff need to make decisions such as ‘can I take this order?’. Despatch may also need visibility of a customer’s status. 123insight’s accounts connectivity options provides tight integration with popular accounts systems such as Sage 50/Sage 200, Access Dimensions and Xero, ensuring you can choose the best accounts system without compromising on your manufacturing system.
So, how do you choose?
‘Best in class’ is the best. Choosing a system that ticks all the boxes for some departments but that is mediocre for others is false economy, so select the best manufacturing system to manage stores and production, and the best accounts system to fit with your business requirements.
Maybe you are happy with your accounting system and looking to implement MRP for the first time but are wondering if you need something all-encompassing. Or perhaps you’ve outgrown your accounts software and want to ‘think bigger’? 123insight has a range of connectivity options with all major accounting systems. So, select the right accounting tool for the job and choose the level of connectivity required. For more information, visit 123insight.com and request access to free online demo videos.