Page 67 - The Pakistan Accountant Oct-Dec 2018

What is ERP? with the vendor for initial setup, training, customisation, ERP is a business software that allows entrepreneurs implementation phase, duration, duration over-runs, post to monitor their business performance in the most implementation services, breakdown of costs and other sophisticated and comparative manner. ERP offers matters is crucial to circumvent misunderstandings. Taking organisations the potential to integrate various operations into confidence and involving key executives or head of that may be spread over several geographical locations, departments for the planned restructuring would suffice to with a flexibility to interact using different apps. It also preventing possible disruptions during the implementation allows control over workflows, thereby providing real phase. A two-way communication is always necessary time reporting for analysis and decision making. Financial to identify possible threats to success, whether due to management, customer relationship management, supply organisational culture, technical competence and change chain management, inventory, human resource (HR) and resistance, and brings about a plethora of wonderful ideas production are some of the few functions among many to mitigate them. that ERP can facilitate. Structuring up the System Getting Ready Chart of Accounts (COA) is one of the Many business enterprises main things in which transactions globally, including Pakistan, are recorded so as to form Trial have implemented or are Balance (TB) for the preparation implementing some kind of of financial reports. Therefore, an ERP. It must, however, be attentive mind and foresight is considered that not all ERP the precondition for structuring implementations become COA. Designing a COA is an successful. According to elaborative process as the Panorama Consulting’s 2017 coding structure developed ERP report, 26% of the ERP in the initial stage is carried implementation suffered failure on for as long as the system and on average, implementation is continued to be adopted by itself took approximately 17 the entity. The account codes in months. Factors that play a vital ERP are generally designed with role in achieving the set objectives separators, each of which can be have been discussed in this article. set to represent a part of the overall enterprise. For example, segments in the Before moving for the ERP, entrepreneurs must code can denote a company in a group, locations set requirements that they expect to achieve out of of the company, cost centers, units and actual account ERP, and determine with the assistance of a qualified ERP heads. Further: technician whether the existing software can be modified ■ To add database in the modules for accounts receivable or updated according to their requirements. The next (AR), accounts payable (AP), inventory, tax structure, cash step requires establishing what modules the accounting and bank details, fixed assets categories, HR, and so on. system would need with relevance to specific business and ■ To link each modular transaction category to the control structure of the entity, along with number of locations accounts in the TB. to spread it over and number of users to be involved taking account of future developments. Flexible as it is, ■ To establish connections among the modules, workflows ERP can be adjusted with additional modules, locations, or walkthrough mechanisms, authorisation matrix, user’s users and workflows at later stage. Resources to finance database and setting up of responsibilities charts so that and accommodate the project must be identified so as the system can be initiated for use. to determine whether to go for on-premise, Software as ■ To develop manuals for the users to get support a Service (SaaS) or cloud-based system and to determine references from, other than the training. which ERP would be suitable in the circumstances. Currently, there are various ERP software, generalised, as Gearing Up well as specialised, available in the market; SAP, Oracle and Training sessions for the users should be planned and Microsoft Dynamics are some of the widely used examples. organised to ensure development of system knowledge and competency. Ways should be demonstrated to tackle It is very important to brain storm with all the stakeholders anomalies due to human errors, bugs or new requirements about specific requirements and circumstances, taking and where to get assistance from. The more and more account of expected future prospects before choosing practice, the better the understanding with the system ERP, vendor and allied matters so as to lay the first brick to will be and the better solutions for the complex issues will avoid drastic failure. Entering into a detailed agreement be arrived at. However, practicing without confirming the October - December 2018 The Pakistan Accountant 65