Any small business owner knows how important it is to control profit margins. Profit margins show how much money the business is making, as well as the general health of the business and any problems that need attention. Controlling profit margins enables business owners to know how profitable they are and determine if money flowing out of the business is the result of core business activities or expenses.
“This is especially important for growing businesses to stay ahead of their rivals in the business environment of the Fourth Industrial Revolution, where a good accounting system is simply not sufficient. Small business owners can now use new technology to gain the business insights they need to manage cash flow, as well as the financial investments required for growth and sustainability,” says Sean Fowles, new business sales representative of Seidor Africa.
Growing businesses can use ERP systems to compare their budgets with actual cost, manage the procurement process, match supply and demand and gain accurate insights before they make strategic business decisions.
Keep an eye on budgets
“During difficult economic times, it is especially important for small business owners to compare their budgets with the actual cost by keeping an eye on expenses budgeted for and actual payments. Without various departments and managers to do this, an integrated system is the easiest way for them to stick to the budget.”
Sticking to the budget also means that they must procure its stock at the best possible price. The right ERP system helps small and medium-sized business owners to compare prices, negotiate better deals and plan purchases to protect and improve profit margins by gathering details of suppliers, cost estimates, purchase orders, returns and outstanding orders.
Optimise procurement
They also need to match supply and demand by optimising procurement. Matching supply and demand can improve profit margins, but it is an onerous task unless an ERP system, such as SAP Business One, is used to check on inventory availability in real time and managing standard and special pricing that include volume, cash and customer discounts and reports to see if the special offers had any traction, Fowles explains.
Get accurate insights
“While a small business owner is making the tea, talking to clients and keeping an eye on what is going on in the business, it is difficult to make the strategic business decisions required. Gathering all the information about the supply chain and company financials required takes time, which they simply do not have. An ERP system can empower them with accurate information they need to make informed decisions and grow profit margins.”
Using SAP Business One, tailored for specific industries, makes it easier for small business owners to grow their businesses and manage their financials. It is also cost-effective and easy to use to get an instant view of the whole business, streamlining and integrating key business functions into a seamless, cohesive unit.
Complete control
Maximising profit margins is one of the key benefits of SAP Business One, offering small and medium-sized business owners complete control and insight over its business processes, enabling better financial management.
SAP Business One can help them to increase cash flow by managing expenses and offers accurate organisational insight that makes it easier to make strategic business decisions and identify opportunities for growth. The core component of SAP Business One financials includes all key accounting processes, such as ledger and journal entries, accounts receivable and accounts payable and even automatically triggers accounting postings in real-time as transactions happen.
“Although it will not make you a cup of tea, SAP Business One will do pretty much everything else a small business owner needs, including financial accounting, cost centres and project costing, budgeting, banking and financial reporting,” Fowles says.