5 Signs It’s Time for SMEs to Automate
Automation can help businesses of all
sizes to become more efficient and in turn, benefit from increased productivity
and customer satisfaction. Seems quite straightforward, doesn’t it?
Surprisingly, according to a Survey, a mere 25% of
small-sized companies are in fact, automated. The decision to go the digital
route is often delayed because of the time and costly resources needed to
develop and implement a new system, and only then, train employees on how to
use it.
Then
again, waiting too long to automate your organization can and does have
consequences. Production workflow, for example, can be affected, even slowed to
a halt or by holding on to manual processes. But what’s affected most of all is
the customer experience that depends on timely development, production and
distribution processes. When these can no longer scale up as the business
grows, the customer is the hardest hit.
Here
are the five bottlenecks that can let small and medium-sized businesses know
that it’s time to go digital.
1. Late deliveries
Where
there’s a large pile of paper orders, it’s easier for an order to be misplaced
or even lost. When order data is recorded manually, it can be incomplete or
incorrect, resulting in products not delivered on time, or not at all. But when
business processes are automated, built-in dropdown lists and validations
ensure complete, consistent and reliable order data. In addition, digital
‘paperless’ orders are easier to share with suppliers, helping to streamline
the entire fulfillment process.
2. Complex sales tax calculations
Tracking
sales tax laws can be time consuming, particularly for businesses operating in
multiple states, where each has different sales tax regulations. What’s
more, this problem is compounded when new products and services with new tax
laws are added to a company’s portfolio. Automation ensures compliance with
regulations in real time, enabling companies to generate “return ready” reports
and perform e-filing saving time and reducing the risk of errors.
3. Duplicate invoices
Paper invoices make it more difficult to
track cash flow and can result in common errors, such as sending a duplicate
invoice or the incorrect invoice to a customer. One industry study determined
that invoice duplication alone can cost a typical SME more than AED 44,000 per
month, a result of the time invested in customer communications, rectifying
payments, and adjusting financial systems. In addition to streamlining
invoicing processes and preventing errors, automatic invoicing can accelerate
collections by sending late paying customers a series of reminders, or retainer
customers, invoices at predefined intervals.
4. Late submittal of payroll documents
There is business out there who manually
onboard new employees. Collecting and filing paper forms is tedious, and
there’s always the risk of not complying with regulations or not submitting
payroll or tax documents on time. According to an estimation that payroll
automation, in addition to ensuring timely filing, reduces processing costs by
as much as 80%. But when is it time for a company to go digital? As a rule,
once a company has grown to the point where they can no longer actually ‘see’
when employees come and go, it’s time to automate their payroll.
Aside from improving accuracy and compliance, automating payroll enables direct
deposit, e-filing, and easier, more reliable tracking of accumulated vacation
time and sick leave.
5. Unauthorized purchases
Automating purchase orders enables
organizations to enforce approval policies and keep actual spending in line
with budget. But once a company implements a full purchase requisition system,
it gains full control over its expenses. For example, one CEO improved working
capital immediately by shutting down the company’s purchasing requisition
system, actually preventing employees
from making unauthorized purchases. However, automating purchase orders can be
tricky, since it typically involves several cross-departmental steps from the
initial request, to receiving the product, and then confirming that all
requirements were met. Due to the complexity of the purchasing process, it’s
often one of the last business processes to be automated.
To potentially achieve the highest return
on investment, businesses should first think about automating processes that
are the most time consuming and present the greatest risk. Advanced
business management systems, namely cloud ERP, can
be an ideal solution for SMEs. These systems are flexible and scalable,
enabling new features and functionality to be added as required, while in
parallel, eliminating both the expense and headache of managing hardware and
software in-house.
The best time to jumpstart your business
automation is one step before system
bottlenecks are a threat to customer satisfaction and profitability. By
implementing a system that can start small and grow as your business grows, it
is possible to automate your organization at just the right time, minimize
risks and put fast-track your success.
Frontline
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