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The Resource Group

Having an Operational Review of Your ERP System is Like Going to the Dentist . . . Nobody Wants to Do It, But Everyone Can Benefit From It.

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I have a deep seeded childhood fear of going to the Dentist.  This was most likely caused by having a tooth pulled without any Novocain as a kid.  It was incredibly painful and leaves me feeling like a 7 year old every time I get in the dentist chair.  I could easily just put off going to the dentist and blame my busy schedule.  However, I find time to go twice a year because I know how important my teeth are to my overall health.  I’ve learned that if I do put it off too long, it just means the dentist finds more things that need to be fixed and the time it takes increases and the cost sky rockets.

Having a periodic Operational Review of your ERP/Financial Management system is the same type of necessary evil.   You can put it off as long as you want, but it will only cost you more in the long run.

No CFO or Controller thinks they have the time or want to spend the money to let someone come in and review how they are using their ERP system.   It will take time out of their users’ busy schedules to go over their daily, weekly, and monthly activities with the consultant.  Most accounting users are so busy they are working weekends as it is just to keep up.  However, making the investment of a little time and money can have huge long term payoffs for both the users and the company.

I recently conducted an Operational Review for a client that has been using Microsoft Dynamics GP for over 10 years.  During those ten years, the business had changed significantly, but their processes in Microsoft Dynamics GP had not.  They were current on their support plan with Microsoft and were running the most recent version of the software.  They even had a license to all of the features in the system.  However, they were not taking advantage of several areas of new functionality that would greatly increase their efficiency and allow them to continue to grow their business without adding more head count in the accounting department.

Some changes recommended from the Operational Review were small, but would pay off in efficiency on a daily basis.  These were simple things like setting default checkbook ID's for data entry.  I also recommended entering both the invoice and the payment in AP or invoice and cash receipt in AR as a single step instead of entering the invoice separately and then entering a separate payment or cash receipt transaction.  Setting up default GL accounts by Vendor was recommended to save the user time looking up past invoices to see where the previous expenses had been coded.   These are examples of just a few of the minor and immediate changes made by the customer which benefit them on a daily basis.

Based on the Operational Review recommendation, we set-up a monthly and year to date Cash Flow statement in Management Reporter.  The Controller was doing this manually in Excel each month and it would take anywhere between 1-4 hours per month, depending on how easy it was to get it in balance.  It took only about 4 hours to create the two version of the Cash Flow statement in Management Reporter and now the reports can be generated each month within minutes with just a click of the button.  We also implemented Multi-Currency in the system to allow them to enter invoices and cash receipts in foreign currencies.  They were doing the invoices manually in Excel and manually converting and calculating everything outside the system for currency translation and exchange gain or loss.

It was also recommended that they purchase our custom GL Copy and Paste Journal entry tool.  They create multiple recurring entries and several one off journal entries that are entered in an Excel Spreadsheet each month as part of the month end process.  These were being manually entered into the system each month based on the information entered into the Spreadsheet.   With the GL Copy and Paste tool, they will save time and data entry errors by just copying the existing data in the spreadsheets and pasting it into the tool to create the journal entries.

The Operational Review also uncovered some larger projects that will be undertaken in the near future.  One of the projects is to automate the creation of invoices in Microsoft Dynamics GP based on billing information coming from both internal and external systems.  Their current invoice process takes the data from the internal and external systems and manually calculates the invoice amount.  The invoices are then manually entered into Microsoft Dynamics GP.  This manual process takes almost the entire month to complete and their continuing increase in sales volume will require the addition of staff if the automated integration isn’t undertaken soon.

As you can imagine, the client is extremely happy with the investment they made in their Operational Review and they are already seeing a return on their investment.  So don’t put it off.  Have your system reviewed on a periodic basis.  This will keep your ERP system running in tip top shape so that it can support the overall health of your business and keep it working smoothly and efficiently as your business continues to grow.

By Denise Hawes, The Resource Group – Seattle, Washington Microsoft Dynamics GP Partner

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