An ERP tracks all costs associated with a manufactured product, including materials, labor, equipment, outsourced operations, and other resources directly required to manufacture the product. An ERP will also include in-depth analysis and reporting tools that allow you to deeply analyze and determine the true costs and profit margins of your operation.
Why Is Business Cost Important?
Knowing your actual business costs is one of the hardest things for a specialty business to understand. Taking into account all the resources used and making it difficult for your business to calculate exactly how much it costs them. However, without a good handle on the business costs, it is difficult to know what to charge for a product , and this can drastically affect profit margins.
How to Find Out Your Real Business Cost?
The best way for a custom manufacturer to better know and manage business costs is to use ERP software.
ERPs provide custom manufacturers with full visibility and connectivity, as well as providing manufacturers with real-time data they can use to better manage their stores. The data and connectivity provided by ERPs allow custom manufacturers to calculate business costs. By gaining a more complete understanding of the time and resources put into each process, you can understand how much a single process actually costs you.
A fully integrated ERP system such as ONYX PRO ERP, enables you to monitor costs throughout the production process and gather information about costs such as allocation of costs per employee wage rate/work center ratio. With an ERP, you can compare your initial estimate with final costs to better understand costs and increase your profitability as well as target profit and/or loss centers.
Some Of The Other Advantages Of Using an ERP System For Business Cost Include:
- Increase profitability by accurately measuring business costs by comparing them to your initial estimate to target profit/loss centers.
- Track standard, average and actual product cost.
- Use real-time job costing to make instant improvements and better predict your profits.
- Quickly identify actual and standard cost variances.
- Ability to analyze profitability by job, project or contract.
- Easily determine profit/loss up to product number.
- Create job cost budgets from estimates or work orders.