If you are running a business, one of your biggest concerns is the management of your finances. This is where the role of an ERP Accountant comes into play. By integrating enterprise resource planning (ERP) systems knowledge with accounting and financial transaction management expertise, these professionals help businesses manage how their ERP system strategy, setup, integrations and financial data flow impact other core areas of the organisation. But what exactly is an ERP Accountant, and how can hiring a specialist impact your business? Read on to find out.
Understanding ERP and Its Importance in Accounting
Before diving into the role of an ERP Accountant, it is essential to understand what ERP is and why it is so crucial for accounting. Put simply, ERP is a software system that automates various manual processes, including accounting, to create a single source of truth. This ensures that all departmental silos within an organisation can work together seamlessly, with a centralised system for sharing information and data.
Given the central role that the finance team plays in every business, having an ERP Accountant is critical. As experts in both accounting and ERP systems, they ensure that the financial module of the ERP system is configured to meet the company’s unique needs and that it provides accurate and timely financial data to support business decision-making. Most ERPs like NetSuite have financial functionality at their core, so it is essential to have an accounting lead to help evaluate your financial management architecture requirements, as your base accounting configurations directly impact almost all other aspects of your ERP.
Key Components of an ERP System
An ERP system consists of several integrated modules. These can vary based on the specific service provider, but some commonly included modules are:
- Financial Management
- Sales and Customer Relationship Management (CRM)
- Supply Chain Management
- Inventory Management
- Purchasing Management
Each module is designed to handle a specific business process, such as managing inventory levels, tracking sales orders, or processing payments. These modules work together seamlessly, providing a complete picture of business operations; however, there are many configurations in accounting that can directly impact downstream functionality and processes.
Short on time? Download this article to read later or share with a colleague.
The Role of the ERP Accountant in Driving Business Growth and Strategy
Examples of How Accounting Configuration Impacts Other Business Departments
Accounting Strategy’s Impact on Sales and Customer Management
The configuration of the Financial Management module can directly impact the Sales and Customer Management module. For instance, the way revenue recognition rules are set up from an accounting perspective will determine when revenue from a sale is recognised in the company’s financial records. This can impact sales reporting and commission calculations in the CRM module. Additionally, the setup of customer credit limits in the accounting module affects cash flow and cash management reporting requirements and influences sales process policies, as sales orders might be blocked for customers who have exceeded their credit limit.
Accounting Strategy’s Impact on Supply Chain Management
The accounting module can also impact the Supply Chain Management department. The configuration of cost accounting rules in the Financial Management module will determine how operational costs associated with the movement of goods are accounted for, the allocation of costs, and any additional costs that are associated with the order, which can influence profitability analysis and a manager’s ability to make accurate decisions in the procurement department.
Accounting Strategy’s Impact on Inventory Management
The setup of the Financial Management module can also have a significant impact on the Inventory module. The valuation methods chosen for inventory (such as FIFO, LIFO, or weighted average) in the accounting module will affect the value of inventory reported in the financial statements for the business in terms of current stock on hand. This can, in turn, impact inventory management decisions, such as when to reorder stock or which items to discount.
Accounting Strategy’s Impact on Financial Management and Purchasing Management
The configuration of the Financial Management module can influence the Purchasing Management decisions. For instance, the setup of accounts payable terms in the accounting module will determine when payments to suppliers are due. This can impact purchasing decisions and the ability of team members to negotiate different terms with suppliers based company’s allowable payment terms.
The Evolving Role of an ERP Accountant
The role of an ERP Accountant is not new, but its importance is growing. As ERP systems become more sophisticated, so do the skills required of accountants. This section explores the traditional accountant vs the ERP accountant, the increased demand for this expertise, and the essential skills needed to succeed in this role.
Traditional Accountant vs ERP Accountant
A traditional accountant focuses on recording, classifying and interpreting a company’s financial information. They may produce reports, advise on taxation issues or handle accounts payable and accounts receivable. An ERP accountant, however, has a more dynamic role, working with internal departments to design and implement ERP systems functionality while also managing a company’s financial strategy. The latter need not only technical accounting skills but also the ability to use standard accounting software packages to automate and streamline financial processes, making them more efficient and effective.
ERP Accountants also have a more strategic role than traditional accountants. They are involved in business planning and decision-making, providing insights into financial data and trends. They work closely with other departments, such as IT and operations, human resources and project resource management leaders, to ensure that the ERP system is integrated and aligned with the company’s overall goals and objectives.
The Growing Demand for ERP Accountants
As businesses become more complex and global, the need for technologically savvy accountants grows. Accounting functions are no longer limited to spreadsheets or manual data entry; instead, they are integrated into comprehensive business management platforms. ERP Accountants bridge the gap between technology and finance and are highly sought after by businesses looking to improve their financial management and reporting.
With the rise of cloud-based ERP systems, ERP Accountants can work remotely and collaborate with internal stakeholders from anywhere in the world. This has opened up new opportunities for accountants who want to work independently or for those who want to work for global companies to help them design and maintain the systems for accounting.
Essential Skills for an ERP Accountant
ERP Accountants play a crucial role in the financial management of a company. To be successful in this role, an ERP Accountant needs a combination of technical and interpersonal skills.
Strong Understanding of Accounting Fundamentals
An ERP Accountant needs a strong foundation in accounting principles and practices. This includes understanding financial statements, general ledger management, accounts payable and receivable, and tax compliance. This knowledge is essential for configuring the ERP system to meet the company’s financial management needs and for interpreting the financial data generated by the system.
Ability to Work with Clients and Understand Their Needs
ERP Accountants often work closely with internal department leads to understand their team’s processes and financial management needs. This requires excellent interpersonal skills and the ability to communicate effectively with team members to understand their requirements and translate them into system configurations.
Analytical Thinking and Problem-Solving Skills
ERP Accountants need strong analytical thinking and problem-solving skills. They must be able to analyse financial data, identify trends and anomalies, and troubleshoot any issues with the ERP system. They also need to be able to devise solutions to complex financial management problems.
Experience with Financial Software and ERP Systems
Practical experience with financial software and ERP systems, such as NetSuite, is crucial for an ERP Accountant. They need to understand how these systems work, how to configure them, and how to troubleshoot any issues that arise.
Excellent Communication Skills
ERP Accountants need excellent communication skills, both verbal and written. They need to be able to communicate complex financial information in a clear and understandable way and to liaise effectively with clients, team members, and other stakeholders.
Ability to Adapt to New Technologies and Software
The world of ERP systems is constantly evolving, with new technologies and software updates regularly being introduced. ERP Accountants need to be able to adapt quickly to these changes, learning new systems and technologies as required.
Key Responsibilities of an ERP Accountant
An ERP Accountant’s responsibilities may vary by organisation, but some core functions include managing financial data, ensuring accuracy, implementing system configurations and managing risks. Let’s take a closer look at each of these responsibilities in turn.
Financial Data Management and Analysis
An ERP Accountant’s primary responsibility is handling the financial data of a business. This includes managing the process and strategy behind recording and cataloguing financial information, as well as ensuring compliance with accounting standards.
An ERP Accountant must be able to manage large amounts of data accurately and efficiently. They must also be able to analyse this data to provide insights into the financial health of the business. This analysis can help identify areas of the company that are performing well and areas that need improvement.
System Implementation and Customisation
An ERP Accountant will generally be responsible for customising and integrating an ERP system according to the individual business needs. Creating customised dashboards that provide real-time access to accurate data complete with relevant business functions is the core of this responsibility.
Implementing Enterprise Resource Planning Software is a complex process that requires a deep understanding of the business and accounting team processes. An ERP Accountant must work closely with your business’s ERP partner to ensure that requirements, in all business terms, but especially around financial controls, are implemented correctly.
Compliance and Risk Management
ERP Accountants are also responsible for ensuring the system is compliant with accounting standards, as well as managing financial risks for the company. This includes discovering and mitigating possible risks and working with IT to implement a plan for managing data security.
Ensuring compliance with accounting standards is a critical responsibility of an ERP Accountant. They must ensure that the financial data is recorded accurately and in compliance with these standards. This ensures that the financial reporting generated is reliable and accurate.
ERP Accountant Qualifications and Training
Education and professional certifications are essential for ERP accountants. This section looks at the required education, professional certifications and continuous professional development mandatory to succeed in this field.
Educational Requirements Professional Certifications
ERP Accountants should have a Chartered Accountancy degree or a related degree in Finance, Accounting, Management or other relevant fields, as well as prior work experience. Candidates with a background in IT or software development may also possess the required skills if they also have strong accounting knowledge
Many ERP Accountants also undertake additional training in areas such as data analysis, project management, and communication skills to ensure they have a wide range of skills, which is required to succeed in this challenging field.
Having a professional certification can give an ERP Accountant an edge in the market, so they are highly encouraged. A reputable ERP Software Vendor will offer an official ERP skills certification program aimed at ensuring third-party vendors and service providers provide a level of service that won’t impact customer satisfaction with their product.
ERP Accounting is becoming increasingly essential in today’s business world, and the demand for an ERP Accountant is on the rise. Companies that adopt modern accounting practices and understand the importance of ERP Accounting stand to gain a competitive advantage. ERP Accountants play a pivotal role in this, as they help businesses manage their financial data in a more efficient and streamlined manner. Providing the requisite skills, expertise and knowledge, ERP Accountants will help companies to stay ahead in the game and drive their growth.