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written by | August 9, 2022

Different Modules of ERP and their Functions

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Table of Content


Over the past few decades, enterprise resource planning (ERP) systems have become a crucial tool for enterprises. An ERP system optimises crucial business operations and acts as a central system for all operational and financial information throughout the organisation. It obtains this information through a number of modules created to assist various departments, like accounting, supply chain, and human resources, in carrying out their particular duties. 

All workers have access to the data they require through an ERP solution, enabling them to pinpoint opportunities for development and address critical concerns regarding their department's performance and future direction. It assures that everyone, regardless of function, is viewing the same figures and reduces data inconsistency and inaccuracy problems. 

Additionally, it promotes improved decision-making, which results in more cost-effective operations. ERP may automate various operations, lowering mistakes and allowing staff to concentrate on more important work. 

Financing and accounting, procurement, production, inventory tracking, order processing, supply chain management, consumer relationship management (CRM) procurement, and workforce management are all supported by common ERP modules. Business services automation, human resources management, e-commerce, and digital marketing are examples of solutions with more advanced functionalities. 

Also read: How to view Stock Details for Each Godown in Tally?

Did you know? In addition to CRM, ERP was cited by 53% of IT decision-makers as an investment priority. 

What Are ERP System Modules? 

Each ERP module is created with a focus on a particular company function, delivering the information and supporting the operations required to do their duties. Every module interface lies in the ERP system, so even when the company adds additional modules, the system offers a central database of accurate data. If the ERP system is the toolkit, the modules are the tools in the box, each of which has a particular purpose. 

How Do ERP Modules Help Businesses? 

ERP's modular structure, which enables it to adapt to changing company demands, is a major factor responsible for its prevalence. Only the modules related to a company's business strategy and operations need to be used initially. As the firm develops, it may add ERP modules to handle any new requirements or difficulties. 

The benefit of modular ERP software would be that it allows for the addition of more features while maintaining the same framework. When the requirement changes, there is no need to create a new ERP system, which is a time-consuming procedure, as long as the business selects a reputable ERP supplier with a large range of modules. 

How Do ERP Vendors Charge for Each Module? 

What is included in an ERP software varies widely, as do the modules that providers charge extra for. The basic package typically includes the essential financial activities, but add-ons like CRM and HRM may be necessary. A manufacturer may purchase a program with logistics management included, or a store would purchase software with commerce included since certain services are grouped by industry. Software-as-a-service (SaaS) suppliers charge per user, month, or year, whereas on-premises ERP vendors normally charge an annual per-user licencing fee. There may be transaction-based fees in some circumstances. 

13 ERP Modules and Their Features 

Finance 

The most crucial ERP module is the finance and accountancy one since it gives organisations the ability to comprehend their present financial situation and prospects for the future. This module's main functions are maintaining the general ledger and keeping a record of accounts payable (AP) and accounts receivable (AR). Additionally, it produces and preserves important financial records, including tax returns, payment receipts, and balance sheets. 

The finance department could efficiently balance the accounts and adhere to current revenue recognition criteria by using the financial management module to handle invoicing, vendor payments, cash flow management, and account reconciliation operations. Additionally, it contains the information that financial planning and analysis personnel need to execute contingency plans and generate important reports, such as profit and loss (P&L) reports and board statements. 

Also read: Know about Automatic Round-off Sales and Purchase Entry in Tally

Procurement 

The procurement module, commonly referred to as the purchase module, aids a company in obtaining the supplies or items it needs to produce or sell things. In this module, businesses may maintain a list of authorised suppliers and link those providers to specific products, assisting with supply chain collaboration. The module may automate quote requests and monitor and evaluate the received bids. 

The procurement module assists the procurement division in creating and distributing purchase orders when a firm accepts a bid. When the order comes in, it may follow that buy order as the vendor converts it into a sales order and sends the products, instantly changing inventory levels.

Manufacturing 

Manufacturing continues to be an important component of ERP. The oldest iteration of ERP, material requirements planning (MRP) programs, were built for manufacturers. Nowadays, industrial management systems or production management programs are commonly found in ERP systems. The manufacturing module aids firms in scheduling production and ensuring they have the infrastructure and raw materials required for scheduled assembly operations. It may be used to update goods-in-progress throughout the manufacturing process and assist businesses in comparing actual output to anticipated output. Additionally, it offers a real-time overview of the production line, recording data on both work-in-progress and finished goods. In order to plan enough production, it can compute the average time to make a product and then evaluate the supplies with the anticipated demand. 

Inventory Management 

Inventory control is made possible by the inventory management module, which keeps a record of the number of items and locations right down to individual SKUs. This module provides a full picture of both present and incoming inventories through interaction with the purchasing tool. This piece of technology aids firms in managing inventory expenses, ensuring they have enough stock without investing excessive amounts of money in inventory. An inventory management tool may compare sales patterns with product availability to help businesses make educated decisions that maximise profitability and accelerate inventory turnover. Stockouts and delays may be avoided, which improves customer service. 

Companies may use the inventory management tool to manage sales orders, purchase orders, and shipments even if they don't have additional supply chain management applications. A variant of this technology that can track inventories across many sites will be necessary for larger enterprises. 

Order Management 

Orders are tracked via an order management module from reception to delivery. Following consumer placement, this component of the ERP sends all orders to the warehouses, distribution facility, or retail location and records their progress as they are prepared, packed, and dispatched to the client. The order management solution enhances on-time delivery rates while preventing goods from going missing to keep customers pleased and save needless costs for hurried shipment. 

Based on the available stock and the buyer's location, more sophisticated order management tools can assist a business in selecting the most cost-effective method of order fulfilment, such as a store, warehouse, or third-party fulfilment partner. 

Also read: Materials Consumption Summary in Tally

Warehouse Management 

Businesses that run their own warehouse facilities might get a quick return on investment by using a warehouse management system. Based on the configuration of the facilities, this program can effectively lead warehouse staff through all warehouse procedures, from put-away once shipments arrive through picking to packaging and shipping. Businesses can use it to arrange labour according to predicted order volume. Based on which picking strategy is most effective for a particular firm, the warehouse management feature can enable several picking techniques, including batch picking, wave picking, and zone picking. Some modules can even display staff the most effective pickup route. 

Workers can locate the appropriate items and expedite delivery when the warehouse management module is coupled with inventory and order management programmes. Faster delivery ultimately improves consumer satisfaction.

Supply Chain Management 

The flow of materials and commodities from sub-suppliers to manufacturers via suppliers to wholesalers to retailers or customers is tracked at each stage by a supply chain management system. Additionally, it may handle any supplies or goods returned for a refund or a replacement. 

Supply chain management could cover various modules, including production, order administration, inventory management, and procurement. It could, however, include features that go beyond what those modules' basic functions can do. 

Customer Relationship Management (CRM) 

All client and prospective data are kept in the customer relationship management (CRM) module. This comprises the customer's purchasing history as well as the company's record of communications with them (such as the time and date of calls and emails). A CRM enhances customer service because staff members can quickly access all the data they want while dealing with a client.

Firms frequently use CRM to handle marketing leads and prospects. It can keep track of interactions with prospective clients and provide recommendations about which consumers to target for certain campaigns or cross-selling possibilities. Professional contact managers, reporting tools, and customer segmentation may all be supported by more powerful CRM modules. 

Professional Services Automation (Service Resource Management) 

 A company may organise and manage projects with the use of a professional services automation (PSA) module, also known as a service resource management module. It allows the management to authorise expenditures and timesheets and record project progress while managing people and capital resources. The PSA module may routinely create invoices for clients based on billing cycle rules. 

Also read: Everything about Multi-Currency in Tally.ERP 9

Workforce Management 

Comparable to a human resource management module, a workforce management module is made for businesses that hire more hourly workers than paid ones. It can keep track of employees' hours and attendance as well as gauge absence and performance. 

The configuration for workforce management may also include payroll. A payroll sub-module manages cost reimbursement and routinely delivers employee payments according to a predetermined schedule. Report on payroll costs, total overtime hours worked, and comparable KPIs are also available. 

Human Resources Management 

A human resource management (HRM) module mostly includes all components of a workforce management programme and a few extras. HRM might be thought of as CRM for workers. It keeps records and files, including offer letters, job roles, and performance reports. 

The HRM module removes a lot of redundant or incorrect data that many firms save in separate spreadsheets since it stores a wealth of information on each worker across the organisation. 

E-commerce 

Companies that wish to sell online can use an e-commerce module provided by some ERP suppliers. Businesses may easily establish a business-to-business (B2B) or business-to-consumer (B2C) e-commerce portal using this module. Leading e-commerce software provides user-friendly capabilities that make it simple for staff members to add new things, alter product material (descriptions, names, specifications, photos, etc.), and modify the website's appearance. 

The e-commerce module provides all transaction, purchase, and inventory data into the common database when it is linked with other ERP programmes. This guarantees that all transactions are recorded in the database, out-of-stock goods are taken down from the website, and shipments are sent promptly.

Marketing Automation 

Some software companies have created a marketing automation module, just like e-commerce. A marketing module manages advertising campaigns across several digital platforms, including text, social media, online, and email. Users only receive relevant communications thanks to strong customer segmentation tools and the ability to automate email pushes depending on marketing objectives. 

In order to influence prospective marketing plans and expenditure, marketing automation software, whether it is a component of the ERP system or a standalone solution, may give thorough information on the effectiveness of projects. These programmes boost leads, client retention, and eventually sales. 

Choosing the Right ERP Modules for Your Business 

There are several modules that perhaps most firms require to conduct their commercial operations; however, the ERP modules a company should invest in will differ depending on the business strategy, industry, present challenges, and other considerations. Every business needs an accounting and finance module to run, keep track of its finances, and guarantee that its payments are paid. Running a firm is challenging without tools that can collect financial data and carry out fundamental accounting operations. 

Almost every firm, regardless of sector or whether it is product-based or services-based, depends on consumers. Thus, CRM is yet another module that'd be advantageous to most organisations, even if it is not as crucial as finance and accounting. 

Similarly, most businesses with more than a few workers will find the workforce management or HRM module to be a worthwhile investment. Companies require a central location to manage their employees' details and career progression, and staff members have to be paid on time. 

A supply chain management module will be helpful for any goods organisation, which is a sector that practically all manufacturers, suppliers, and retailers fall under. Since inventory and order monitoring are essential to day-to-day activities, most businesses start with those and may add manufacturing, warehouse management, and procurement systems. 

With a project management module, service providers like consultancies, bureaus, and maintenance and repair firms might quickly see their investment pay off. It streamlines operational resource planning and streamlines labour-intensive, complicated invoicing procedures. 

Although many organisations rely on trade and marketing technology to draw in and convert consumers, some people would not classify these software applications as being part of ERP. This is especially true now that the internet has become the main source of new business. Although there are many marketing optimisations and business solutions offered by non-ERP vendors, those provided by your ERP provider offer a stronger, more dependable integration and could have a shared user interface that lowers the learning curve and boosts staff engagement. 

Also read: Know how to run Tally ERP on Mac?

Conclusion 

Buying and integrating an ERP system used to be difficult, if not overwhelming, but by starting with the best ERP system for your company, you can lay the groundwork quickly and expand it as your business expands. The best ERP modules for your company address your immediate needs and are expandable so you can take advantage of the difficulties and possibilities that come with expansion. 

You can use the Biz Analyst application to manage your business effectively. It syncs with Tally data making it easy to access even if you’re offline or on the go. You can manage the accounts, create ledger entries, access business reports, and more to keep your business on the right track.

FAQs

Q: What are CRM modules in ERP?

Ans:

The management of several disciplines, particularly production management, financial management, and human capital management, is improved by the CRM Module in ERP.

Q: What are the mandatory modules of any ERP system?

Ans:

A firm's ERP modules depend on its business requirements, but most implementations begin with a finance module that streamlines accounting operations, keeps track of all financial data, and generates crucial reports. As every business has to handle its clients, a CRM is yet another well-liked feature. Inventory management, order processing, and other distribution chain-related modules are frequently needed by firms that deal in goods. In contrast, professional services automation software is frequently needed by enterprises that provide services.

Q: What is ERP and its types?

Ans:

Enterprise resource planning, or ERP, is a framework that many firms use to facilitate their ongoing operations. The ERP is interconnected with systems that control crucial business operations in the areas of finance, supply chain, human resources (HR), customer relationship management (CRM), project management, and many more. 

ERP may be delivered via a variety of methods, including cloud, on-premises, and hybrid. In contrast to an on-premises network, which needs local, company-owned infrastructure, a cloud system uses remote servers and may be controlled by the software provider. A hybrid strategy combines both elements of on-premises and cloud ERP solutions.

Q: What are ERP modules?

Ans:

Applications specialised for particular corporate operations and activities are known as ERP modules. Since all modules are connected with the ERP system's main database, there is only one reliable source of data. Additionally, it makes it simple for many systems to communicate and cooperate in carrying out more challenging activities, such as finance and inventory management.

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The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.
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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.