An effective ERP system can help you to consolidate and standardize existing data throughout your organization, which will help your operation to run more smoothly and provide consistent input for analysis and reporting. The insight provided by consistent reports based on accurate data will support better, faster decisions and reliable cost and profit breakdowns. To ensure your company’s ERP system uses reliable data, follow these tips.

Periodic data cleansing

Despite everyone’s best intentions, bad data may creep in to your system over time. Put a procedure in place to root out bad data and to identify the source of the bad data. Correcting duplicate customers, unpaid invoice balances, negative inventory quantities and small balances that will never be completed on work orders will improve your data and improve planning processes. It is equally important to uncover the source of the bad data and ensure that you change the process to prevent actions that result in the bad data.

Sort and analysis codes

Most ERP systems have a variety of codes that it uses to sort and aggregate data for reports or planning purposes. When you first implemented your system, you may have spent time deciding on the right codes to use, but just as your business changes over time, so should the codes you use. You may have realigned sales regions, introduced new product lines or added a new class of items to inventory, and any of these events might require a new classification code or the retirement of an old one. Review all your codes at least annually to be sure they still meet your needs and educate the team on the definition of each code so they know how to choose the correct code for a transaction.

Security and passwords

Enforce strong passwords and periodic password changes to help keep the system secure. This helps to ensure that only authorized people process transactions so the input is more likely to be correct.

Audits

Audit your data periodically to be sure it is reliable. One form of data audit might be cycle counting inventory. Part of the reconciliation process for cycle counts should be tracing discrepancies back to the error source so that mistakes don’t happen again. Audit other key information such as payables, receivables and open orders and identify the sources of errors.

Simplify input

Whenever possible, simplify input into the system by using automated data collection or turning off unneeded prompts and fields. Ensure that your process requires that people enter transactions as close as possible to the location and time where the actual activity occurred to minimize the likelihood of forgotten or erroneous entries.

Follow these tips to clean up your ERP data and to prevent errors. As a result of these actions, your planning processes will be more efficient, inventories will be lower and stock outs will be reduced, but the benefits go beyond day-to-day processing. More importantly, your reports will reflect the reality of your business and provide the real insight necessary to support decisions and strategic planning.