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What are Cloud Based ERPs?
Cloud Based ERPs are similar to traditional accounting softwares. However, you dont need to install the ERP on your systems. Access to the ERP is through a web browser or an app. Similar to the SaaS (Software as a Service) business model.
You just need internet access to use the ERP. So one can access their data from anywhere as its stored on remote servers. So accounting can now be done on the go. From any device including desktop, laptops and mobile devices.
Read on about the features, benefits and examples of cloud based ERPs.
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What is an ERP?
ERP stands for Enterprise Resource Planning. But here we refers to the ERP software. That is, the software and systems used to plan, manage and run a business.
There are individual ERP applications and then there are suites of ERPs. An individual application handles just a process of the business. Or a few processes of the business. While the suite has a large number of applications. And may as well cover all the processes of a business. Allowing integration and a flow of data between applications. Which help in streamlining processes and greater efficiency.
Generally, a ERP suite handles a range of business functions. Including supply chain, manufacturing, services, financial and other processes of an organization. Ideally, using an ERP properly leads to better overall performance. An ERP should align with your company’s strategy, workloads, performance and security needs.
In this article we talk about cloud based ERPs. More specifically, cloud based accounting systems.
What’s the difference between cloud based and traditional accounting software?
So there are many differences between the two. Cloud based accounting ERPs are considered more modern. And hence more flexible. You access data from anywhere. And that too from any device. You just need an internet connection.
For the on-premises ERPs, every time a firm grows, they need more software license. And maintenance costs increase as well. though even for cloud based ERPs, most charge on a per user basis. But an advantage here is that you dont have to purchases expensive hardware or servers.
Also, cloud based ERPs requires less maintenance than its traditional counterpart. The provider completes backups and updates occur automatically. And you dont need to download or install anything on your systems.
Why is this important now?
We have personally witnessed many businesses with offline ERPs come to a standstill. All because of Covid 19. Working from home may or may not become a norm. However, with lockdowns and quanrantines being declared. We need to prepare for contingencies. Due to Covid 19, working from home is necessary. Offline traditional ERPs do not play a part in this. And only cloud based ERPs can help. If there is a time to make changes, it is now.
Real Time Reporting
Cloud based ERPs allow real time reporting. Any update in a transaction triggers a data sync. All reports are updated on a real time basis. So you can view your Profit and Loss account or Cash Flows or your Balance sheet any time. That too with upto date data.
Learning Curve
No doubt there will be a learning curve. Shifting from one ERP to another is a tough task. But with personal experience we say that you get used to it. Not only that, you’ll prefer the cloud based ERPs over offline ones. Further, most vendors have great documentation. A good support team. As well as consultants.
Security: Is my data secure?
Popular cloud based ERPs provide a secure environment. go through frequent audits. And have dedicated security teams.
So the chances of data loss is more or less the same as the chances of your laptop or desktop being stolen or destroyed. Both options have a few risk. But the cloud ERP providers also have back up servers. Incase of data loss, your data may still be recoverable. Also, incase a server goes down due to natural disasters, damage etc, other server would still be able to continue operations on the ERP. While we cant say the same thing about traditional offline ERPs.
Also, most providers now store the data on India servers. However, there are still some that store it outside India. We recommend confirming this with your vendors.
Will shifting to a cloud based ERP be financially sound? will it save money?
Well it depends. Unlike traditional ERPs, cloud based EPRs dont require upfront payments. Instead, they offer monthly payments systems. These do help in saving costs. And do not require large upfront investments. But there are training costs. Having good people reduces this. Same case when migrating to an ERP with good documentation. We’ll say that this depends on a case to case basis.
What Next?
Alright. So you’ve decided on shifting to a cloud based ERP. What next? do you go and subscribe to the most popular one. No! The next step is research. Out of the many ERPs available in the market. Which one would suit you and your business best.
List of the popular cloud based accounting ERPs:
In this article, we also share few of the best cloud-based ERP software that you can find on the market today. We assess them in terms of how they integrate resources well from different departments, their usability, customisability, and analytics. Hopefully, you find something that fits your business requirements and preferences.
- Zoho Books
- Quickbooks
- Wave
See more here
Final Thoughts
We are aware that everyday a new ERP shows up. But this is a sign of a maturing market. As more people come in, the market matures and grows. However, not all ERPs are equal. Some are very general, others highly-advanced, and others are specialized. Or special purpose ERPs.
But one thing to remember is that while ERPs promise so much, success does not come overnight. Or just via a one-time purchase. Shifting to a new ERP sounds like too much work. And it could be so. The biggest challenge when it comes to ERP implementations is organisational change. Even though most businesses report improvements after using a newer ERP. Most also report slight delays in the projects and budget issues.
But remember that its an investment. Modern ERPs offer so much in a single package. They can lead to increase in efficiency and value.
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