Enterprise resource planning (ERP) software typically comes packaged in a modular (components), à la carte format. Customers can choose individual components (i.e. inventory control) to add or remove functionalities as needed for their business operations.
While exact module names and functionalities vary by platform, this guide will cover the six most commonly used ERP modules. Read our complete guide on ERP modules for an in-depth look at more ERP components.
The six most commonly used ERP components are:
The accounting and financial management component of an ERP has similar features you’d expect from a standalone accounting solution. This module tracks and analyzes your business’s budgets, cash flow, and profit/ loss through the general ledger.
The accounting component handles accounts payables and receivables, financial transactions, tax statements, and more. Essentially, it helps you stay on top of your business’s financial health…
Financial modules provide real-time data and can also help with task automation. When implemented right, this can save your employees time and help guide confident financial decision-making.
The inventory management component tracks stock levels and product prices that your company sells and purchases. You also gain an overview of current stocks of raw materials and recommendations for reordering them. These features assist with order fulfillment and can potentially reduce the need for manual inventory control processes.
Inventory management modules track the precise locations of items through serial numbers, product IDs, and SKUs. This preciseness depends on the method that the inventory is tracked. For example, inventory can be tracked by RFID technology or barcodes and bins. Integration with the ERP’s procurement module tracks incoming supplies and inventory.
Inventory management often integrates with supply chain management to keep a steady stock and prevent delays. Forecasting tools are also used to determine product trends and generate accurate supply and demand predictions.
A CRM helps your business manage leads and tracks communication between sales agents and customers. A well-managed CRM allows companies to increase sales success and deliver better customer service.
Some CRM module tools include lead tracking, customer order history, contact management, and sales agent activity. You can track customers at every stage of the sales funnel, from the beginning marketing stage through sale completion, all the way to the customer service follow-up.
To optimize the customer experience, the CRM keeps a detailed log of customer interactions and conversation history. This log is a crucial tool to avoid customer irritation from redundant interactions. You can also track purchasing behavior to help sales agents determine the best times to upsell.
An HR module helps you manage your company’s HR needs, from onboarding, to offboarding, and everything in between. This component automates critical tasks that are often time-consuming and can lead to errors when conducted manually.
These critical tasks include employee payroll, time tracking, scheduling, productivity, benefits administration, tax payments, and recruitment. It also keeps track of employee records such as salaries, hours worked, PTO, and performance reviews.
The data from HR records assists with calculating accurate production costs. This record-keeping also empowers managers to make better data-driven decisions about employee time and resource allocation to achieve productivity and profitability goals.
Business intelligence (BI) is the most recent addition to the list of standard ERP components. Modern companies want to make data-driven decisions, and BI tools offer actionable insights to improve these decision-making processes.
Having a fully integrated ERP allows data to flow through every system component, and BI takes advantage of this. BI collects and analyzes that data, then delivers reports in your choice of visual formats. These reports eliminate data silos to showcase a holistic view of your company’s performance.
The supply chain management module streamlines the supply chain process, from acquiring raw materials to delivering the finished product. These tools allow you to automate sales forecasting and labor, dock, and yards management.
Within supply chain management are secondary modules for things like warehouse management, procurement, inventory control, order management, and manufacturing.
These modules collect real-time data to assist with predictive analytics and demand planning, helping you effectively plan and execute manufacturing and distribution while minimizing costs. This real-time data also allows you to respond quickly to supply and demand changes.
Here’s a list of some additional components that your business might need in your ERP system: