Automating the Future of FinanceA peek into ERP & Payroll

Solutions for higher performance!

Introduction

Introduction

Your finance department is responsible for managing the company’s financial risks, financial planning and financial reporting. But is it in control? Does it have full control over your financial processes? Complete control over data feeds? Intelligent control on reporting?

Businesses need to ensure accurate and consistent financial close on time, every time. The best-in-class automation solution frees up time and resources to devote to more financial analysis, and reduces the overall stress on your finance department.

A financial management system is the methodology and software that an organization uses to oversee and govern its income, expenses, and assets with the objectives of maximizing profits and ensuring sustainability.

An effective financial management system improves short- and long-term business performance by streamlining invoicing and bill collection, eliminating accounting errors, minimizing record-keeping redundancy, ensuring compliance with tax and accounting regulations, helping personnel to quantify budget planning, and offering flexibility and expandability to accommodate change and growth.

Introduction

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Introduction

Other significant features of a good financial management system include

Keeping all payments and receivables transparent

Amortizing prepaid expenses

Depreciating assets according to accepted schedules

Keeping track of liabilities

Coordinating income statements, expense statements, and balance sheets

Balancing multiple bank accounts

Ensuring data integrity and security

Keeping all records up to date

Maintaining a complete and accurate audit trail

Minimizing overall paperwork

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Financial accounting (or financial accountancy) is the field of accounting concerned with the summary, analysis and reporting of financial transactions pertaining to a business. This involves the preparation of financial statements available for public consumption. Stockholders, suppliers, banks, employees, government agencies, business owners, and other stakeholders are examples of people interested in receiving such information for decision making purposes.

F

Profit

Finance

Income

Operation

Technology

Product

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Financial accountancy is governed by both local and international accounting standards. Generally Accepted Accounting Principles (GAAP) is the standard framework of guidelines for financial accounting used in any given jurisdiction.

It includes the standards, conventions and rules that accountants follow in recording and summarising and in the preparation of financial statements. On the other hand, International Financial Reporting Standards (IFRS) is a set of international accounting standards stating how particular types of transactions and other events should be reported in financial statements. IFRS are issued by the International Accounting Standards Board (IASB).

With IFRS becoming more widespread on the international scene, consistency in financial reporting has become more prevalent between global organisations. While financial accounting is used to prepare accounting information for people outside the organisation or not involved in the day-to-day running of the company, management accounting provides accounting information to help managers make decisions to manage the business.

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Web based Accounting Software is an application that records and processes accounting transactions within functional modules such as accounts payable, accounts receivable, banking, payroll, trial balance and prepare financial statements. It is often referred to as an online, cloud based, hosted, internet based, ASP or even software -as-a-service (SaaS) Accounting software application systems.

Debit Rs RsCredit

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Enterprise Resource Planning

Enterprise resource planning (ERP) is business management software—typically a suite of integrated applications—that a company can use to collect, store, manage and interpret data from many business activities, including

ERP provides an integrated view of core business processes, often in real-time, using common databases maintained by a database management system. ERP systems track business resources—cash, raw materials, production capacity—and the status of business commitments: orders, purchase orders, and payroll.

Product planning, cost

Manufacturing or service delivery

Marketing and sales

Inventory management

Shipping and payment

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The applications that make up the system share data across the various departments (manufacturing, purchasing, sales, accounting, etc.) that provide the data. ERP facilitates information flow between all business functions, and manages connections to outside stakeholders.

ERP

InventoryProduction

Accounting

Purchase

HRDelivery

Sales

Engineering

ProductionPlanning

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Enterprise system software is a multi-billion dollar industry that produces components that support a variety of business functions. IT investments have become the largest category of capital expenditure in United States-based businesses over the past decade. Though early ERP systems focused on large enterprises, smaller enterprises increasingly use ERP systems.

The ERP system is considered a vital organizational tool because it integrates varied organizational systems and facilitates error-free transactions and production. However, ERP system development is different from traditional system development. ERP systems run on a variety of computer hardware and networkconfigurations, typically using a database as an information repository.

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CharacteristicsERP systems typically include the following characteristics

An integrated system that operates in (or near) real time without relying on periodic updates

A common database that supports all applications

A consistent look and feel across modules

Installation of the system with elaborate application/data integration by the Information Technology (IT) department, provided the implementation is not done in small steps

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Payroll

In a company, payroll is the sum of all financial records of salaries for an employee, wages, bonuses and deductions. In accounting, payroll refers to the amount paid to employees for services they provided during a certain period of time. Payroll plays a major role in a company for several reasons.

Payroll automation refers to the use of computers to produce pay checks and manage benefit payments for a company or community. Often, payroll automation is integrated into the company’s enterprise resource planning system that provides an overall view of the company’s or community’s finances; in addition to payroll, it can manage customer relationships, production, personnel resources, invoicing and accounting.

Payroll automation

Payroll

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Payroll activities

Calculating and paying wages, settlement of tax withholdings

Delivery of wage calculations and certificates to the employees

Compiling statistics for different authorities, and for the purposes of improving activities

Drawing up employment contracts

Providing regulatory reports to the tax agencies and insurance companies

Calculating annual holidays

Managing deductions for employee benefits

Payroll management consists of several stages and procedures that require expertise in financial administration, such as employment contract management. Payroll management performs the following tasks

The travel costs and travel invoices from the employees are usually processed together with payroll.

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MethodsPayroll functions can be automated using software to facilitate the collection, organization and storage of all information required for payroll calculations and regulatory agency reportage requirements.

If the payroll software is not purchased as part of a comprehensive business management system, it can usually be combined with the company’s existing solutions for accounting, sales ledger, working hour management and recruiting.

Information that has been captured in one part of the system can be used by other modules. Hours registered in the work management system, for example, are automatically transferred to the wage calculation system.

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BenefitsEffective payroll automation collects all relevant information in one place in electronic format, reducing mistakes by eliminating the need to synchronize and manage otherwise duplicate data sets.

This improves the work satisfaction of the wages clerk, as routine work is reduced. The American Payroll Association (APA) estimates that automation reduces costs related to payroll management by up to 80%, which is partially explained by the reduced mistakes in wage payments and invoicing.

Payroll

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It considers collective labor agreements and employer-specific procedures and exceptions

It provides a breakdown of the allowances and other bases for wages in the report, with dedicated rows for each day, week and month

It automatically follows the legislated accounting and calculation rules in the calculation of annual holidays

It manages the drawing up, posting, archiving and reporting of travel invoices

When combined with work shift management software, it can utilize data concerning working hours, overtime, allowances, holidays and absences

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Well planned, modern payroll software provides the following benefits

Do’s and Don’ts for Future Finance AutomationWealth, asset and investment management firms are experiencing record results. In 2013, assets under management grew to a record $68.7 trillion, while operating margins grew 39%. Things couldn’t be brighter for the industry.

Automate ProductsIncumbent firms already have many of the necessary licenses and regulatory infrastructure to support the automation of offerings such as life insurance, secured loans and annuities.Develop automated investment services that cover a broader range of complex financial needs. This could also offer an opportunity to experiment with new models, such as peer-to-peer lending and social networks of investors.

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Get more HumanThe greatest value a human financial advisor offers is focusing a client’s attention on what matters, and on a bigger picture. Clients are prone to loss aversion bias, and during market swings, they may make choices that are highly damaging to their long term financial health.Human advisors can effectively address that client behavior better than any automated process or a call center representative. Humans can also more effectively initiate contact with clients around life events and other changes that impact goals; this prompting can be kicked off, and amplified by the digital platform.

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Automate Services and influence New InvestorsIncumbent firms must develop products that allow them to offer relevant services to younger, lower net worth individuals that will be the next generation of high net worth clients. The days of investors migrating to old-school advisors in middle age will come to a screeching halt.

Those investors are already drawn to automated, passive, low cost vehicles. Each company will need to offer an automated solution that mimics this core value proposition while offering a more sophisticated, curated offering.

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Client First PolicyThe days of salespeople as brokers are numbered. Demand that all advisors and brokers adhere to the fiduciary standard. Few customers trust that decisions made by a broker are in their best interests.

Companies perceived as exploitative—with opaque fees and murky conflicts of interests—will face a tremendous trust gap when a generation of digital natives who expect transparent access to information controls most of the wealth. Act in the customer’s best interest, not just in marketing, but in practice.

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About Orchestrate

Solutions for higher performance!

Orchestrate is a US based business process management organization with Headquarters in Dallas, Texas. Orchestrate offers services to the diverse outsourcing requirements of clients in an extensive range of businesses including IT, finance, mortgage and contact center. We provide a comprehensive suite of technology and services to our clients that help accelerate sales and boost their profit. Our solutions and services help SMEs and enterprises implement technologies and processes that boost their profitability across the organization.

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