Three things wrong with separate financial and rental systems.
There are many organizations that start with a financial system and eventually add a separate system to handle the unique aspects of the rental industry. Although this would appear to be simpler and less costly than changing out the financial system for a new integrated system with rentals, this environment creates significant ongoing problems and costs that never go away.
Duplicate data entry
Any time you enter the same data more than once, you are risking data entry errors. Similar to keeping key data in spreadsheets, having data in different systems means you can never be sure the data is actually correct and that it was received in a timely manner. And, if you think your data is integrated, see point number three below. There are practical problems with data in two systems. As an example, purchasing activities tend to be in the operating system but financial transactions such as payments in accounts payable have to reside in the financial system. Which system owns and tracks inventory? Tough to leave it just in operations as you need the cost of held inventory and cost of goods sold in the financial system on a real-time basis.
Analysis can be difficult In today’s competitive market, organizations need timely access to both financial and operating information. Going back and forth between two systems is less than ideal and again risks having data that is not consistent between the two systems. Having two systems removes the possibility of drilling down from the financial results to the detailed operating activities underlying those transactions.
“Integration” does not always mean your systems are properly integrated and it can be quite costly The definition of what integration means will vary widely according to the person you ask. It can be as simple as taking the month-end journal entries from one system to another or it can mean every single transaction integrates in real-time as it is processed in the originating system. Less integration usually means lack of detail, batch integration at periodic intervals, and less out of pocket cost. More integration starts to give you better information but potentially at a much higher cost to create and maintain over the years as the two system are upgraded, which is normally at a different schedule. In summary, any integration is never as complete as people think and can have data integrity issues, timing can be a problem, and be very costly.
If you are running two systems for your business, one for financials and the other for rentals, you will likely always have inefficiency and extra cost that you wouldn’t incur with a single system. Microsoft Dynamics NAV, the world’s most popular mid-market ERP and accounting system, supports financials and rentals with real-time information as up to date as the last field update in a screen. Imagine what that could do for your business operations and decision-making.
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