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Tag: Financial System

  • ERP system in Financial Management Essay

    ERP system in Financial Management Essay

    ERP system uses in various industries in China, such as accounting, financial management, and so on. There are some problems in the ERP application at this stage. The application cost is high, the system types are various, the enterprise selection is difficult, and the lack of universality, versatility, and standardization requires high requirements for the development of the enterprise and the quality of the employees. System data entry and update The accuracy rate is difficult to guarantee, and the construction period is long. Effective solutions to these problems are proposed to promote the smooth progress of ERP financial management.

    Here are the articles to answer, the doubts about the ERP system in Financial Management Essay!

    In simple terms, an ERP system integrates all resources within an enterprise and uses computers to replace all manual operation processes, thereby improving processing efficiency and enhancing the overall competitiveness of the enterprise. With the continuous development of computer technology, automatic processing of problems has become more and more popular. To cope with changes in the external environment and keep up with social development trends, more and more enterprises choose to apply ERP systems. The ERP system makes enterprise data electronic, information automation, and data sharing, but there are also a series of problems such as financial information leakage, management mode adjustment, low staff quality, and capital outflow.

    The application status of ERP systems in financial management

    In the process of enterprise development, logical and clear financial management is very important, and the automated ERP financial management module plays an important role in the entire system. There are interfaces between the financial module and other modules, and the whole is highly integrated, which can realize the integration of financial products and logistics. At the same time, the information data generated in the process of procurement, production, and sales can be automatically included in the financial module, and further general ledger and accounting statements can be generated.

    In this process, most of the operations are done automatically by the computer. The application of the ERP system in financial management can integrate all resources of the enterprise, allocate resources reasonably and adjust the work of various departments, basically realizing the dynamic, timely, and integrated data, electronic data input and storage, and authority of operation management responsibilities. , risk management systematization, and other functions. Everything has two sides. While the ERP financial system brings convenience to enterprises, there are also some problems, which affect the function of the ERP financial system.

    Problems exist in the application of ERP in financial management

    The enterprise management mode does not conform to the ERP management mode

    Applying ERP is not a simple process of purchasing information tools, but an important decision to re-change the business process of an enterprise. To implement ERP, we must experience great changes in the business model of the enterprise and the working habits of employees. ERP is a management model related to all parties involved. The application of the ERP system requires companies to sort out business processes in advance, then simplify and reorganize, and finally realize automated operations.

    The ERP construction cycle is long and the implementation cost is high

    The implementation and application of an ERP system is a rather long process. It usually takes 3 to 5 years from the installation of the software to the formal operation, but experts believe that 18 months is the best. This is because equipment and software systems are replaced very quickly, and the depreciation rate of the system is also very fast. Delays will lead to serious asset losses and reduce benefits. Some ERP systems cannot complete the instructions issued by customers in time in the application, thus increasing the workload and causing the operation management of individual enterprises to fall into a chaotic state.

    There are many types of ERP systems, and it is difficult for enterprises to select models

    At present, various software companies are continuously established. Although the ERP system modules are roughly the same, the project details are quite different, resulting in no unified standard for the entire ERP system. A large number of enterprises have failed in the selection stage before implementing ERP because they do not realize that the ERP system serves the development strategy and goals of the enterprise.

    The low professional quality of employees is not conducive to the application of ERP

    The computer operation ability of employees is also an important link to test whether the ERP system can be successfully implemented. The implementation and operation and maintenance of the ERP system require the promotion of compound talents with certain computer knowledge, familiarity with the ERP system, and enterprise management. Also, you may like Effect of Corporate Accounting on Internal Control.

    ERP system application lacks flexibility

    With the change in the external environment, the organization and management of the enterprise will also change. Companies need to adjust organizational processes and resource strategies promptly. This requires that the application process of the ERP system can be flexibly modified. You may like to know, What is Gynecomastia Surgery and Treatment?

    Lack of anti-corruption technology in the process of high-tech implementation

    Many enterprises have failed to implement ERP systems due to the influence of corruption. Some people take advantage of the pursuit of new technologies by enterprises and entrepreneurs and the urgent need to enhance the competitiveness of enterprises, to promote immature systems or systems that have failed many times to enterprises. This unhealthy atmosphere has resulted in a large loss of enterprise funds and the failure of ERP system applications.

    ERP system has hidden dangers to information security

    As information technology continues to mature, more and more information is stored in the form of electronic files. With the advancement of data Electronization and data sharing, the problem of information leakage has become more and more prominent. If a series of confidential documents such as the performance, assets, and liabilities of the enterprise applying the ERP system is mastered by competitors, it will increase the competitive pressure.

    Lack of research on risk aversion in the implementation of ERP systems

    Many people only know the advanced management concepts embodied in the ERP system, but do not understand the huge risks in the implementation of ERP. Due to the lack of awareness of ERP, many entrepreneurs invest blindly, which is an important reason for the high failure rate of ERP applications. In Western Europe, most small and medium-sized enterprises will carry out risk measurement and risk analysis according to the BS7799 standard when applying ERP, and formulate strategic warning lines and warning points to avoid implementation risks, which play an important role in avoiding ERP risks to a certain extent. effect.

    Solutions to the problem

    Improve the implementation basis of the ERP system

    When building an ERP system, an enterprise needs to have a reasonable management model and at the same time provide effective data support for the establishment of the system.

    Strengthen the integration of ERP systems with other information systems

    The ERP system has achieved the unification of logistics and capital chains. If you want to include more comprehensive business information, it will lead to too large data in the ERP system and greatly increase the cost. Combining other information systems in the ERP system-based framework can reduce the difficulty of system maintenance and upgrades.

    Strengthen the understanding of the ERP system

    Guide employees to understand and learn the ERP system, and let them realize that the ERP system is not only a financial management tool but also represents an advanced management concept. Enterprise managers need to formulate overall strategic goals and development directions. When an enterprise chooses the type of ERP system, it needs to analyze the characteristics of the product and the needs of the enterprise itself, to choose the ERP system suitable for the operation of the enterprise.

    Improve the quality of corporate financial personnel

    The computer technicians responsible for operating the ERP system need to master a certain knowledge of financial management, and the financial department needs to timely feedback on the relevant information and management requirements of financial management to the operation and maintenance department of the ERP system. The staff of the financial management department needs to learn certain computer knowledge, communicate with the operators of the ERP system in time, improve the implementation efficiency of the ERP system and play its role in enterprise management.

    Suppliers and enterprises work together to create a dynamic system

    Suppliers need to create a personalized system suitable for the enterprise according to the enterprise process. It is necessary not only to understand the outstanding sections and functions of the enterprise but also to confirm the enterprise process. After a detailed and comprehensive understanding of the management and production process of the enterprise, a dynamic system is created. Only by giving full play to the advantages of the universality and pertinence of the ERP system, can the ERP system be used better.

    Enterprises should screen out powerful suppliers that can promote their development, and have a full understanding of suppliers’ reputation, system quality, and later operation, maintenance, and upgrades. It is also necessary to understand the outstanding sections, powerful functions, follow-up operation and maintenance, and expansion capabilities of the supplier’s system. Do a good job in the overall planning, determine the future development direction of the company, and select a supplier that is not only suitable for the present but also conducive to future development.

    Implement an integrated and transparent fully automatic management system

    Enhancing the intelligence and automation of the enterprise ERP system can realize the comprehensive and intelligent operation of the company’s financial management, to achieve the purpose of preventing corruption and creating a more complete system integration. The key function of system integration is to share data.

    When the integration is established, it is necessary to focus on monitoring enterprise data to prevent information disorder or backward updating, so that the company can allocate procurement and sales more efficiently. Enterprises should fully consider the influence of suppliers and customers, implement “transparent” management, put an end to “rebates”, and win the trust of the public with a good image.

    Improve the accuracy of the information and ensure information security

    The ERP system needs to provide the input data to multiple organizational departments for use, and the use of an integrated data system can reduce the number of information input. To ensure the authenticity and reliability of the financial data of the enterprise, it is necessary to increase the internal communication of the enterprise, pay attention to the real-time status of the information at any time, and achieve the purpose of eliminating errors.

    When suppliers build systems for enterprises, they should pay more attention to the rigor and relevance of logic between functions and modules, to reduce the possibility of system loopholes and make “hackers” no chance. Enterprises should improve the security awareness of relevant personnel, strengthen information security system management, and establish a sound information security management mechanism.

    Conduct a careful feasibility study

    To avoid risks, companies should conduct a comprehensive risk assessment before deciding to implement ERP. In the early stage of the ERP project, a feasibility analysis should be carried out, and a warning line to avoid risks, defensive measures before the occurrence of risks, and efficient first aid measures after the occurrence of risks should be formulated, to effectively avoid risks.

    ERP system in Financial Management Essay Image
    ERP system in Financial Management Essay; Photo by ThisisEngineering RAEng on Unsplash.
  • 5 Types of Savings Account in the Financial System

    5 Types of Savings Account in the Financial System

    What are the 5 Types of Savings Account in the Financial System? Domestic Savings means; Saving is earnings not spent or deferred intake. Methods of saving encompass placing money apart in, for example, a deposit account, a pension account, an investment fund, or cash.

    Here is the article to explain, How to define the Types of Savings Account in the Financial System?

    A recent Pew Research study found that one-third of American adults have less than $1,000 saved up in emergency savings. This is concerning, as it means that many Americans are not prepared for an emergency. One way to help boost your domestic savings is to make conscious choices about how you spend your money. One way to do this is to create a budget and stick to it. This will help you identify where you can cut back to save money. Additionally, you can make sure to set up a domestic savings account. These accounts are designed to help you save money on your regular expenses. By putting your money into a domestic.

    What is saving? Saving is the balance that remains after the consumption needs of an individual. People who buy on credit and have incremental EMI commitments would save little or no every month. Saving helps in pooling funds for the future. Saving also includes lowering costs, such as habitual charges. What are the basic types of savings accounts? Savings may be widely based on the three sectors specifically as; Household Savings, Private Corporate Savings, and Public Sector Savings.

    Household Savings:

    The household zone savings are a predominant source of domestic financial savings and a huge part of the increase in the GD rate emanates from the increase. The trendy annual record of the Reserve Bank of India offers records on family financial savings which forms the most important aspect of combination savings in India. The savings of households may be regarded as Individuals, Proprietorship Partnership corporations, and all Non-company enterprises.

    Household savings include two segments specifically financial savings inside the form of bodily property and monetary assets. The bodily property includes land and homes, plant and equipment, and stocks held via individuals, corporations, and different non-corporate companies. The monetary assets include forex holdings of families, deposit holdings of banks and non-financial institution organizations, existence insurance fund, provident and pension funds, the Unit Trust of India and other monetary establishments, claims on Government including internet purchases of bonds and small savings assets via households, and the internet purchases of shares and debentures using families.

    Before monetary zone reforms, family financial savings will normally be inside the shape of physical belongings and as the monetary gadget matures, monetary intermediation will channel extra financial savings into the economic side and finance more effective investments. Till the mid-nineties, household financial savings in monetary belongings had been extra than family financial savings in the form of physical financial savings.

    Now as in line with the state-of-the-art estimates available, it’s miles the physical savings which are greater than the ones in financial assets. More than fifty-two percent of the overall family savings are in the form of physical belongings compared to 44 percent in the early nineties. This shift in saving closer to physical property shows is that at present family financial savings in the system are being pushed now not by way of contemporary incomes, but using expected destiny cash flows.

    Private Sectors Savings:

    Private corporate financial savings contains financial savings from non-public economic establishments, nongovernment establishments, non-economic agencies, and so on so forth. According to the Central Statistical Organization, records on corporate price range imply a widespread development in company profitability for the duration of the present-day 12 months.

    The fee of personal corporate savings stood at around 3.7 percent of GDP within the Nineties stepped forward to 4.8 percent in 2004-05. This rate can be slightly lower in 2005-06 as contemplated in a slowdown within the profitability of the company zone as compared to 2004-05. Yet, company consequences for the primary quarters of 2006-07 suggest a buoyant growth in employer profits that can translate into a progressed rate of company financial savings for the contemporary economic year.

    Public Sector Savings:

    Public Sector Savings encompass financial savings from Government sectors, Administrative Departments, and so forth. The will increase in public area savings was the result of sizable discounts within the dissaving’s of the government management.

    The discount in dissaving’s through the government as mirrored in lowering sales deficits of the vital and country governments have halved from 7 percent of GDP in 2001-02 to a 5.7 percent in 2004-05; it became similarly fallen to a 5.1 percent in 2005-06. Savings from branch businesses like railways, telecom, and infrastructure developments remained in large part stagnant members of the Gross Development Product (GDP).

    With efforts being directed to satisfy the objectives, public zone savings may be predicted to be in addition consolidated in the cutting-edge year; the estimates of the finance for 2006-07 have pegged revenue deficits of the primary authorities (as a percentage of GDP) at 2.1 percent. As per the RBI’s brand, a new compilation of kingdom budget records monitor that the blended sales deficits of states have declined from 1.2 percent in 2004-05 to 0.5 percent every within the subsequent years.

    5 Types of Savings account;

    We have 5 different types of savings accounts which may be anticipated from household savings, non-public quarter savings, and public region financial savings as follows:

    Regular Savings Accounts:

    This money owed is termed as Savings Bank Account, Recurring Deposits, and Current Accounts. Saving account and Recurring Deposits gives some interest, however, the cutting-edge account offers a nil charge of interest but it allows you to function with poor stability.

    Savings Bank debts are sometimes referred to as “passbook” debts. It is an easy way to begin a saving application due to the low starting deposit requirements. There may be limitations on the wide variety of withdrawals. Today banks offer a wide variety of economic offerings that will help you to shop.

    Certificates of Deposit (CDs):

    Savings may be parked within the form of “term deposit” money owed in the banks due to the fact you agree to leave your cash within the account for a particular length (known as the “period” or “maturity”) in return for the institution gives you a better feel of the hobby.

    Terms vary from 1 or 12 months to 10 years. Some CDs do now not allow extra deposits. Typically, the funds are reinvested after the period is reached until you specify in any other case inside a given duration. Usually, there are also consequences for early withdrawal.

    Savings within the Bonds:

    Savings can be converted into numerous bonds like Government Bonds, Public Sector Undertaking Bonds, Corporate Bonds, State Loans, Treasury Bills, and so on.

    Savings in the Institutional Investments:

    The Life Insurance Corporation of India (LIC), The Unit Trust of India, and Employees Provident Fund (EPF) bagged nearly one-third of overall economic savings in India. What is the Communication? Savings within the form of Insurance regulations are merchandise designed to cowl the risks of losses from positive predetermined events.

    Savings in the form of Mutual Funds is a rising vicinity and still, eighty percent of the mutual funds market is occupied using UTI. Savings within the form of Pension plans are designed to provide for the retirement of the investor. These institutional traders procure financial savings from the family sectors, personal region, and public sector gadgets.

    Savings in employer shares and securities:

    Final Types of Savings Account, Savings of the family, personal, and public area units may be financed inside the commercial enterprise stocks, debentures, bonds, deposits, and many others., These financial savings can be short-term; medium-time period, or long-term counting on the interest of buyers.

    5 Types of Savings Account in the Financial System Image
    5 Types of Savings Account in the Financial System; Image by Mohamed Hassan from Pixabay.