Complex organizations might debate the merits of centralizing their accounting, regulatory, and enterprise control functions as opposed to allowing those functions to remain distributed throughout various arms of an organization. Proponents of distributed reporting might argue that reporting is more accurate when employees who are close to the corporate functions that generate data for the reports are charged with handling those reports. The counter argument is that centralized reporting is more critical to move an entire organization forward because it better connects the disparate parts of the organization.
Financial ERP software is an ideal solution to satisfy both sides of this debate. That software aggregates information generated by each of a company’s operating units and makes that information accessible across all levels of the corporation. The benefits of this aggregation accrue throughout the organization:
- All workflow and data collection is streamlined. Inefficient data collection and recording that can introduce errors into accounting and regulatory reporting systems is minimized, and all personnel operate within the same parameters.
- Data systems are transparent in a financial ERP system. No one person or department in an organization can create a fiefdom to control individual aspects of the organization’s business. This increases teamwork and a unified sense of purpose within the organization.
- Corporate management can make more effective financial decisions. Financial ERP software coordinates accounting, statutory, regulatory, and operational control functions under a standard umbrella. This gives management a better opportunity to allocate resources as needed and to concentrate on areas where an organization has the best opportunities for growth and expansion.
- In corporate environments that place a premium on data security (e.g. health care organizations), financial ERP software can be configured to limit data access only to personnel who need access to that data, which minimizes risks of data leaks outside of the organization.
- Financial ERP software improves collaboration between operating units and corporate management. That software creates a better connection with improved data flow between managers of operating units and corporate enterprise management. Enterprise management can compare and contrast standardized data reporting from different units to implement each unit’s best practices across and entire organization. Since the data collection and reporting is more objective under a financial ERP software system, individual unit managers are less likely to object to such implementation with arguments that the data did not originate within their own unit structure.
- Depending on the nature of their businesses, corporations are subject to regulatory reporting under the Sarbanes-Oxley Act, the Dodd-Frank Act, the Patriot Act, and at least fifteen other United States laws. Collecting and maintaining accurate data is the crux of regulatory compliance. Financial ERP software provides company-wide financial integration to track and record accounting data in a centralized location, and in the process, it reduces the cost of regulatory compliance.
No corporate organization can survive either by centralizing its accounting, regulatory, and enterprise control functions without data input from the operating units that it seeks to make the subject of centralized control, or by allowing each operating unit to develop its own reporting and then attempting to unify those separate reports. Financial ERP software systems create a two-way flow of real-time information to create a central aggregation of individual unit data with feedback that allows each unit to participate in the overall management of the enterprise.