How to choose the right ERP software and when to scale up your solution

How to choose the right ERP software and when to scale up your solution

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ERP software is the centrepiece of your finance tech stack, so it’s important you make the right choice for your business. We spoke to Konstantinos Andreou, Director of Financial Control at Juni about what makes a good ERP and when it’s time to scale up your solution.

What is ERP software and why is it important?

ERP stands for enterprise resource planning. An ERP stool is used to manage all the information and resources in the company’s operations.

Business operations are managed with tools like Xero, Quickbooks or Fortnox, which are accounting software with add ons to give extra capabilities, or ERPs which are a comprehensive tool like Netsuite with all the applications they need to run the business efficiently, with tasks like sending and receiving invoices, receiving money and managing KPIs.

You may not need to use the full suite of features if your operations are on the simple side. However, if you’re running a listed business, you’ll definitely need a more comprehensive tool like Netsuite.

With an ERP, you can do:

- Accounting

- Bank reconciliation

- Invoicing customers

- Tracking metrics and KPIs

- Paying invoices (accounts payable)

An ERP solution is a one-stop shop for a finance team! Managing as much information as possible in one place makes it really simple to get your accounting done, manage large amounts of financial data and turn it into useable insights.

Which size solution do I need?

The main difference between low-cost solutions like Xero, Fortnox or QuickBooks and enterprise tools like Netsuite is how they work and which functionalities they can offer.

Xero, for example, is classed as a cloud based accounting software, but it integrates with many other solutions that can do a wide range of functions, making it suitable for a lot of businesses. The big consideration for solutions like this is whether your business is operating in multiple countries, locations and currencies with multiple cost centres – and as a result, how much you’re willing to spend on a solution to save time.

Low-cost solutions, priced from €10 a month, have one thing in common – they support very few currencies. They also often focus on local markets, which has implications for VAT. Using a solution like this could fit a smaller business that only operates within one or two countries that would be willing to use a different solution for each market, for example, Xero or Quickbooks for the UK and Fortnox in Sweden. Choosing to use a low-cost solution to handle transactions in multiple currencies could mean a lot of work. To prepare consolidated financial statements, you would need to convert everything into your main currency, which could take days to complete manually if you’re combining different templates from more than one accounting tool.

In comparison, Netsuite and other enterprise-level ERPs can operate in multiple markets, be customised for each market and use local exchange rates. It can also handle intercompany relationships and more complex operating structures, locations, business models and needs for deeper business insights. This makes it a good fit for international businesses with subsidiaries in several countries and handling multiple currencies.

What to know when you’re choosing your ERP

When you’re choosing your ERP solution, there are several questions you should ask to find a good fit for your business needs.

What’s your budget?

There’s a big price difference between different tools. Starting at around the €10 a month mark for entry-level solutions, moving on to mid-level tools which can come in at around €3k a month for a standard package and increase to between €5-10k a month depending on your business, like subsidiaries, users and additional functions. There are high-level options too which reach into the hundreds of thousands, but these are used by complex, multinational corporations.

Do you need inventory management?

If you’re selling a physical product, look for an ERP solution that offers inventory management. You can get monthly reports on items in and out and do inventory reconciliation. This saves time, can help generate valuable insights and consolidate sales KPIs with other information.

Multiple markets or subsidiaries?

Which countries you operate in and if you have subsidiaries in other countries will have a big impact on which solution you choose. Check which countries you operate in and if the software you choose can operate there, for example, using the right currencies and VAT tax to integrate with local authorities like Making Tax Digital in the UK.

If you’re operating in several markets with multiple currencies, you have two options – save money or save time. For example, you could have a low-cost solution in each country to ensure you’re operating correctly. However, the trade-off is spending more time manually consolidating all that information. Instead, you could pay more for a mid-level solution which will handle multiple markets easily in one place.

Want to integrate your bank?

Integrating your bank with your ERP solution means you’ll be able to import transactions and other important information to avoid the time-consuming manual work of adding this manually. Juni integrates with Xero, and soon we’ll offer SIE file exports to easily handle your accounting in compatible software, like Fortnox.

How do you do accounts payable and receivable?

However you handle your invoicing, it needs to work with your ERP tool. For example, if you’re using Stripe or Salesforce, see how your sales invoices and contracts can be transferred to your ERP solution and match these invoices with payments.

Also, decide how you want to manage accounts payable for vendor invoices. You could choose to integrate with another tool, but it will depend on how you run your approval system.

Will you need customisation?

If you have multiple cost centres, locations and warehouses in specific countries, you want to have the correct tax for transactions, so make sure your ERP can handle that. Look out for a solution that offers tags for the transactions, so you can have the right codes in your accounting.

Need to manage fixed assets?

If you produce the product you’re selling, then fixed assets, like machinery, are an important consideration. You need software that can manage fixed assets and handle depreciation for you.

How do you handle employee expenses?

You might want to have your employee expenses in a separate tool from your ERP, to get more control of approvals or to distributing ownership of employee expenses with multicurrency virtual cards from Juni.

You can save lots of time handling receipts by distributing budget ownership across the organisation. When you give each employee their own card, the employee will become a budget owner and be responsible for the expenses that go through their card – including the receipts. With Juni, you can create as many virtual cards as you need! You can then set controls to monitor, limit or block spend at card level and approve transactions.

How can Juni help you manage your finances?

Juni fits into your tech stack and helps finance teams boost visibility, improving productivity with more control. Juni can help you save time managing payment flows and streamline the accounts payable process. It’s also a useful way of getting cash flow analytics, media metrics and storefront data from Amazon and Shopify in one place to access consolidated insights.

If you choose Xero as an accounting tool, Juni already integrates with that. Automatically sync your bank feed from Juni directly into Xero to speed up your accounting. If you’re using another solution like Netsuite or Fortnox, we’re launching an SIE file export soon to make it even easier to incorporate Juni into your finance tech stack and do your accounting.

Juni can also help you boost your cash flow with cashback on all your eligible spend and access flexible capital with extended terms*.

When to scale up your ERP

Look at your whole cycle for customer orders and billing and how you manage this within your existing tech stack. If you’re spending too much time on manual work, starting to operate in multiple countries, taking on more employees in different jurisdictions, or increasing business complexity, it might be time to scale up your solution.

Whether a mid-level solution is right for you will depend on how complicated your operations and revenue and expenses cycles are, where your vendors are based, and how much of the process you want to automate.

You need to make sure your business is in the right place to scale up. There’s a significant price difference, and mid-level software like Netsuite often requires several employees to get the most out of running it.

Whatever solution you choose needs to be right for the state of your business, so make sure you have a comprehensive overview of your financial needs before making a decision.

*Capital is currently only available for companies registered in the UK, Netherlands and Sweden. Eligibility, credit line, and credit line increase are subject to application, review, and financial circumstances. 37-day payment terms guaranteed, with up to 60 days available. Terms & Conditions apply.

How to choose the right ERP software and when to scale up your solution
Financial platform

Juni is the financial platform built for ecommerce. We give you a unified view of your finances, with cards, mulitcurrency accounts, and banking, accounting and advertising integrations - all in one place. We can even help boost your cash flow with working capital, cashback and more.

Download our free whitepaper and gain important ecommerce and marketing insights, directly from Juni.

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