11 Problems Of Not Having An ERP In Your Company

Did you know that the tools chosen to manage the main areas of your company can help increase your production, solve problems, and have a global view of your business? That’s what ERPs like SAP Business One modules are for, for example.

However, a wrong choice can also harm the entrepreneur’s management and even cause financial losses! Therefore, check out in this article eleven ways in which opting for traditional methods of recording processes and data, such as Excel, for example, can delay your growth. Follow along!

Loss Of Productivity In The Sales Team

If your company’s processes still need to be updated, your salespeople are likely wasting more time on bureaucracy than on developing customer relationships.

Do you know those processes like sending follow-up emails or making notes about when to get back in touch with a specific customer? Yes, ERP automation could make this salesperson’s life easier, freeing him from this task.

This way, your employee has more time to do what matters: attracting new customers and ensuring sales.

Without Organization, Information Becomes Diffuse And Outdated

Let’s imagine some possible scenarios. Think about the different duties of your finance team. They take care of paying salaries, monitoring what was received, renting company space, and purchasing products from suppliers to replenish stock, for example. As a result, they end up using three, four, five, or more different Excel tables!

Finally, imagine that an employee is fired and he was the holder of important files for the work in his area. This can cause rework and loss of relevant data for the team he was part of.

Manual Processes Increase The Chances Of Data Errors

Now, imagine that the price of a product has changed, and now the company’s various teams need to change this figure manually in different documents that they use to work. If the employee has a lot of tasks and waits to update this price later, they may need to remember and work for days with outdated data.

Furthermore, Excel formulas can be entered with errors, and sometimes, a small error in typing a value can make the company calculate a more positive or more damaging scenario than the reality of its finances.

Financial Problems: Losses And Lack Of Financial Control

How much raw material does your production use monthly? Is there a seasonal variation in this spending? How much does this material cost? What are the delivery times for new materials, and who are the partner suppliers that offer reasonable payment terms?

To run a profitable company, you also need to pay attention to these types of details and closely control all budgets, expenses, and earnings. After all, why pay extra for something that could be delivered for a lower price and with the same quality?

Lack Of Understanding Of Cash Flow

Let’s think about your company’s expenses. It is essential to consider all the bills paid monthly for infrastructure, the purchase of inputs for production, the payment of salaries and other labor benefits, the possible replacement of defective equipment, etc.

If we evaluate the gains, we need to look at the new service provision contracts and the terms for which they are active or, in the case of products, how much was recently sold.

However, pay attention: it is straightforward to get lost in this calculation without implementing technology for this calculation. 

Difficulty Managing Inventory

Another issue that can harm your business’s productivity is stockouts. It is necessary to manage this item because a lack of products means a loss in sales, and a lack of raw materials can lead to semi-finished products or a complete pause in production, which can also lead to a drop in sales. Furthermore, there is always the risk of materials being stolen from stock.

Although manual inventory processes exist to organize inventory data, they are highly subject to human error. And, you already know: in the long term, a few units that were counted too little or too much can generate consequences when they add up in the long term because even extra purchases can become losses when the products expire, for example.

Difficulties In Implementing Performance Indicators

Here, the reasoning is simple: if your company cannot trust business data, how can you establish attainable and realistic income goals?

Furthermore, if the data is measured inconsistently, it is also difficult to evaluate how your performance has been to determine whether the business is doing well or not.

However, with your organization and a resolution to this problem, it is easier to establish growth forecasts, bonuses for employee performance, find productivity bottlenecks, or realistic delivery deadlines.

Drop In Productivity

There’s no way around it: with goals to achieve, managers paying attention to performance based on actual numbers, and being able to make decisions because the data is reliable, it’s almost impossible to guarantee that your company continues to grow stably. After all, if we don’t know where we’re going, any path will do.

Customer Loss May Increase

Marketing guru Philip Kotler stated that acquiring a new customer costs between 5 and 7 times more than keeping a current one. In other words, creating customer retention strategies is necessary for financial reasons.

To do this, invest in a management system where you can enter your customers’ information, purchase history, consumption data, and other aspects that affect your consumer journey. This way, your sales employee can monitor customer activity, receive alerts when there is a long period without purchases, and run incentive campaigns to prevent churn.

Decision-Making By The Entrepreneur Becomes Much More Difficult

Another consequence of dealing with inaccurate data in your organization is that the entrepreneur needs to know where to start evaluating the company’s scenario to make decisions.

This makes long-term planning more complicated, especially when discussing launching new products, expanding business operations to other cities, or expanding into other market segments.

If you have already adopted an ERP like the SAP Business One modules, then you will avoid this type of problem. 

Missed Deadlines For Payments, Receipts, Deliveries, And Replacements

Missing payment deadlines means your company will spend extra on late bill fines. Payment deadlines mean failing to charge customers for default and affecting your cash flow due to the lack of these amounts.

Delaying deliveries means you will let your customers down, and they may decide not to buy from your brand anymore. Delays in replenishing materials can cause everything we already talked about in the section about stock.

Also Read: Use ChatGPT Successfully In Your Company