How POS and ERP systems work together to
optimize sales reporting
Whether you run a microbusiness or a conglomerate, the ability to leverage data effectively is now a must. The emergence of accessible Enterprise Resource Planning (ERP) software and Point of Sale (POS) systems means that businesses of all sizes can now easily use current sales data to consistently facilitate decisions with low risk and maximum gain.
Though both ERPs and POSs are becoming more commonplace in Philippine businesses, their potential and synergy are not always explored to the fullest, especially with it comes to report functionality. This is not a problem for organizations with an ERP that already includes a POS Philippines sales teams can use. However, in cases where POS systems and ERPs come from different vendors or are not set up properly, the potential of these systems for leveraging sales data cannot be tapped to the fullest.
These situations can present a challenge to businesses that need to compete in a data-driven world. Fortunately, decision-makers can begin making positive changes by learning how ERPs and POSs can work in tandem to provide them with up-to-date sales reports. Here’s how these systems synergize to provide businesses with next-level sales reporting capabilities:
- Automated data entry
Modern POS and ERPs can both significantly reduce the need for manual data entry. However, if these systems are not linked to each other, some level of manual data input will still be required to produce reports that require data from both sources. In contrast, integrated systems automatically transfer sales data captured at the POS to the ERP system, ensuring accuracy and saving valuable time. This automation guarantees reliable financial records while also enabling staff to focus on value-creating tasks.
- Real-time financial reporting
POS-ERP integration provides access to critical sales data in real time. With real-time reporting, sales and marketing departments as well as supply chain managers are given more time to adjust to market conditions, reducing risk and enabling a maximization of profits. In particular, cash flow management can be improved significantly, as real-time reports can better provide a true state of the business, allowing finance teams to keep cash reserves at consistently optimal levels.
- Improved inventory management
Integrating POS with ERP systems ensures that every transaction updates inventory levels as it happens. This accurate inventory tracking helps maintain optimal stock levels, improves the accuracy of the cost of goods sold calculations, and prevents losses from miscalculations and pilferage. The integration also enables inventory forecasts based on real needs rather than on educated guesses, reducing the risks associated with inventory decisions.
- Centralized financial data
Enterprises operating multiple POS systems across various locations or sales channels often have to contend with fragmented financial data. With POS-ERP integration, data is consolidated into a unified system with a single source of truth, providing all stakeholders across the business with an accurate picture of their organization’s financial health.
- Enhanced reconciliation processes
The centralization of data also means that the reconciliation of sales data with bank records becomes more straightforward. Once an ERP is set up to receive automatic updates on sales data from the POS, matching sales data with bank deposits and statements becomes much simpler, benefiting the business’s audits, tax preparation, and investor relations.
- Refined customer management
Integrated systems provide a unified view of customer interactions, including purchase history and preferences captured at the POS. If the system also includes Customer Relationship Management (CRM) and other types of marketing modules, the business can potentially increase customer lifetime value and reduce the costs associated with facilitating each sale.
Systems that integrate all these business areas have a near-infinite number of useful options available to them. For instance, based on purchase history, individual customers can automatically be targeted for a personalized marketing campaign. They can also be enrolled in loyalty programs or be contacted for exclusive special offers. The integration of the ERP, POS, and other related systems will also enable much of the work to be done automatically, reducing the effort needed to gain customer loyalty.
- Improved credibility
As mentioned earlier, a centralized and integrated system ensures better compliance with regulations and provides a clear audit trail. This is particularly valuable for sales reports required by investors and external regulators. Since there is no manual encoding and only a single set of sales data, external parties can use this information as an accurate account of the reports they’re presented with. Ultimately, these integrated systems can be key to better transparency and trust in the business’s operations.
Considerations for POS & ERP integration
Seamless sales data processing requires a successful integration between POS and ERP systems. Sourcing solutions from the same vendor and ensuring that both systems’ APIs (Application Programming Interfaces) work seamlessly for data exchange is crucial to maximizing the benefits of these systems. Additionally, successful integrations may require an initial period where staff need to implement data mapping and field matching for product codes and other such details. Critically, the integrated solution should also be scalable to handle the expected increase in transaction volumes.
Despite these roadblocks, integrating POS systems with ERP software is a move that meaningfully transforms businesses in areas beyond sales. This integration provides a clearer, more accurate view of a company’s current position, empowering all of its key decision-makers businesses to wield data proactively, not to just bump up sales figures but to encourage sustainable growth in all areas. As more companies look to the future, POS-ERP integration stands out as one of the few technology projects that are undeniably worth the effort.
