While Europeans have long had to adapt to working in many languages, currencies and legal jurisdictions, a generation ago most midsize companies in the United States did all their business in their home country and in U.S. dollars. Today, though, the relentless globalization of the world economy means that an increasing number of midsize companies in North America are functionally multinational and face the challenges of managing a more complex and demanding accounting and financial management function.
Although I usually use the term “midsize” to refer to companies with 100 to 1,000 employees, in practice there is no bright line that when small businesses cross it signals executives to move up to software better suited to midsize corporations. Many companies put off changing their accounting and financial management system as long as possible. Such U.S.-based midsize companies that begin to operate in other countries are likely to discover that their small business or legacy midsize company software isn’t up to the task. Probably they can still record transactions accurately. The issue is that now it’s too difficult and time-consuming to create the full range of management and statutory reports across the enterprise and harder to do the typical ad-hoc queries to uncover variance drivers or perform analyses. Their finance departments have to concentrate on handling the basics and have little or no time left to perform more value-added functions that can drive better performance for the department or the company.
Infor has released FMS Sunsystems Enterprise, a financial management system for midsize companies, especially those that must operate in a multinational environment. It incorporates a new user interface, better reporting and more capabilities to support a range of finance department functions. Being Web-based it can support users in remote locations, such as small domestic offices or overseas subsidiaries, where a company might not want to have software installed.
Infor designates the product “FMS,” not ”ERP,” because it includes reporting, budgeting and planning capabilities that make it easier for finance departments to get useful information out of the system and manage the full cycle of planning, reviewing performance and re forecasting. The software has purchase and order management capabilities, as well as professional services automation functions such as project accounting, resource management and time and expense management. Companies also can use FMS to store the invoices, purchase orders and other business documents related to the transactions recorded in the system.
The product utilizes a multidimensional database for storing financial information. It enables companies to establish a “unified ledger” combining the general ledger, accounts receivable and payable, sales and purchase ledgers and any other user-defined ledger; the combination makes it possible to have a consolidated view instantly without having to run a consolidation process.
As well, a multidimensional database makes it inherently easier to support multiple currencies, tax regimes, calendars and charts of accounts. This is important because, for one thing, countries have different statutory requirements for accounting and taxation.
So, for example, while a U.S.-based company will use US-GAAP (generally accepted accounting principles) for its consolidated financial statements and apply Internal Revenue Service (IRS) rules to calculate income taxes, its subsidiary operating in the United Kingdom will report its results (in pounds, of course) using accounting principles set out in International Financial Reporting Standards (IFRS) and calculate taxes based on Her Majesty’s Revenue and Customs rules.
The multidimensional structure makes it easier (in this case) to generate the U.K.-specific reports while simultaneously consolidating the subsidiary’s data into a set of headquarters-level management, financial and tax reports. Furthermore, a multidimensional structure can make the system more flexible since dimensions can be modified or added as business conditions dictate, making it easier to adapt to, say, changes in product line organization and, over time, enabling a company to get a higher return on their software investment.
Finance departments of multinationals need software that supports their more complex environment and gives them the flexibility to adapt to changes in currencies, taxes, jurisdictional reporting requirements and localization. The same applies to large multinational companies that choose a two-tier approach to their ERP systems – one where the corporation uses “tier one” ERP software for its headquarters and major business units but also uses ”tier two” packages designed for smaller entities in places where it would be too expensive or harder than it’s worth to deploy a tier-one application.
I recommend that midsize companies, especially those that have operations in multiple countries, and larger, multitier multinationals that are considering replacing their existing ERP financial management software consider Infor’s FMS Sunsystems Enterprise.
Source:business exchangeAuthor:Robert Kugel