Every business owner would agree that an effective cash flow is essential for any organization to run
successfully. A domain specific Enterprise Resource Planning (ERP) approach in the ever dynamic
construction industry makes your business capable of creating an efficient, effective and a more
dependable cash flow. Whether it’s invoicing, inventory or reporting based on available data, ERP
systems help improve the overall well-being of any construction business big or small. Let us explain
Timely generation of invoices and clearing the outstanding ones is one of the first steps in maintaining the
health of construction cash flows. With an ERP solution, this task becomes much simpler as it is
automated. There is no need to wait until the next billing cycle as invoice can be created on-demand as
soon as the work is completed. This is helpful because the faster you send the invoice; faster will you get
Furthermore, by putting all your receivables and collection information at one place, an integrated ERP
system is also enabled to provide you with a clear report on which invoices are outstanding and why.
Knowing this allows you to follow up with the stakeholder concerned and always stay on top of the
situation and improve your cash flow as well as customer service.
Most of your business’s capital is in inventory. An ERP system gives you relevant updates and insights to
assist in making wise, informed and controlled purchasing. With the help of purchasing and planning
reports, you can see what are the items that you need to reorder, which items are not selling and when is
the best time to restock. With an efficient inventory planning, you can gain more control over spending
and stocking only what you need without creating surplus.
People in the business of construction can benefit immensely from an ERP system as it provides easy
access to instant, accurate, real-time reports on cash flow. With these reports, they can obtain data on
specific transactions, patterns, and overall fluctuations in the cash flow. These instant reports give
snapshots of your business for various benchmarks like budgeted cost vs awarded costs as well as manage
fluctuations on a regular basis. Indeed, there’s no better way to understand and take control of your cash
flow than with these comprehensive reports.
A construction ERP provides reports on demand that you need for obtaining in-depth insights on the
factors causing fluctuations in your cash flow. You can easily pull out the customised data you need to
make calculations like construction time estimation and its possible repercussions on the cash flows.
This information gives you the necessary heads-up and allows you to follow up with the right person to
improve your customer service and retention.
Using an ERP system is the most efficient way of knowing and understanding a business’s cash flow. If
you’ve delayed purchasing ERP software because of the cost or because you think your business is too
small to need it, you should think again.