3 Ways Project-based ERP Software Increases Profit for Service Firms
As a Professional Services firm, you're focused on two things:
Completing projects on time and on budget
Maximizing profitability on every project
When you had a relatively small team and a small number of projects, you could track every aspect of your projects using spreadsheets or simple project management tools. And you had a pretty good idea of how profitable each project would be. But as your business grows and you take on larger, more complex projects, it becomes more challenging to stay on top of every detail.
To optimize profit and drive continued growth, you need the right systems in place. Here's how a project-based ERP solution can transform your organization and uncover hidden profit.
1. Create More Accurate Project Budgets
We all know that planning is crucial to a successful project. Your budgets include everything from resources and materials to other expenses, like travel. The more accurate your budget is right off the bat, the more opportunity there is to earn profit. You don’t want to be half-way through a project and realize your budget is almost gone because you didn’t allocate enough for labour. That’s not a pleasant conversation to have with your client and it can be difficult to recover those costs.The best way to set accurate budgets is to use historical data. Every project you finish is an opportunity to refine your budgeting for future projects. You’ll learn what tasks take longer to complete than you thought and identify areas where you can scale back the budget. When your ERP system is integrated with your project management activities, you can track your planned and actual budgets in the same system. You'll have greater visibility into past performance, so why not use it?
2. Reduce Time and Expense Leakage
One of the most common places that project-based companies lose profit is during execution. If your team isn't tracking all time and expenses against the project, you’re missing an opportunity to capture profit. Now, there could be several reasons for this. It could be a training issue, where your staff don't understand the importance of accuracy. Or it could be a limitation of your systems. With a project-based ERP solution, recording billable time and expenses can easily be done in minutes.
3. Bill Clients Faster
The more accurately you can track your billable time and expenses, the more accurately you can bill your clients. And with the right project-based ERP system in place, reviewing and approving those costs is quick and easy, reducing your time to invoice. You’ll see the result right in your cash flow – the faster you can bill your clients, the faster you get paid.
Boost Profit with a Project Management ERP System
These three areas are where you’ll see the bulk of the return. But it doesn’t end there. Our Professional Services ERP solution based on SAP Business One generates significant efficiency gains in your administrative processes. Running a single system for project management and operations eliminates duplicate entry of employee time for project tracking, billing and payroll purposes. Your team will spend less time in status meetings and more time working, increasing your capacity to take on the next project in the queue.