Benefits of Upgrading ERP Software for Consulting Firms

Efficiency and accuracy are paramount in consulting. Firms often juggle multiple projects, each with its own set of requirements, deadlines, and budgets. To manage these complexities, many firms rely on enterprise resource planning (ERP) software. However, not all ERP systems are created equal.

An ERP system with project management functions and payroll can offer significant advantages. Here’s why consulting firms should consider making the upgrade.

How an ERP can enhance project management

One of the primary benefits of upgrading to an ERP system with integrated project management functions is the ability to track productivity by project. Traditional ERP systems may offer basic project tracking, but integrated systems provide a more comprehensive view.

Real-time tracking

With integrated project management, firms can monitor progress in real-time. This allows for immediate adjustments if a project is falling behind schedule or over budget. The accounting team can become more actively involved in calculating the work-in-progress and revenue recognition process — as opposed to only getting involved when the contract is completed and having to reverse revenue what was expected to be earned.

Resource allocation

An advanced ERP system can help allocate resources more efficiently. By understanding which projects require more attention and which are on track, firms can deploy resources where they are needed most.

Improved collaboration

Integrated project management tools often come with features to enhance collaboration among team and executive members. This can include shared calendars, task lists, and communication platforms to keep everyone aligned.

Integrated payroll for better contract management and compliance

Automated calculations

Integrated customer invoicing and payroll systems can track employee hours and automatically calculate customer invoices. The ERP can be configured to automatically generate the customer invoice based on the agreed-upon markup or bill rate in the customer contract.

Alerts are also sent to supervisors and employees when there are missing time sheets. This reduces the risk of errors and helps employees be paid accurately and customers billed on time. ERPs can also prepare revenue and invoices based on predetermined milestone dates. This helps streamline the process of having to track deliverables on spreadsheets and emails.

Regulatory requirements

Recordkeeping continues to be more complex. The Fair Labor Standards Act requires payroll records to be kept for three years. California, Colorado, Montana, and Nebraska prohibit employers from implementing a use-it-or-lose-it policy for paid time off and payments upon termination are likely necessary.

Further, the California Private Attorneys General Act (PAGA) allows employees to assist the state in enforcing labor laws by suing their employers on behalf of the state for violating the Labor Code to recover civil penalties. For example, PAGA has strict rules around recordkeeping for lunch, after-hour emails, and text messages that an ERP can assist with tracking.

Also, depending on the frequency and revenue earned while working in a state, a company or its employees may be subject to taxes outside of their home state.

Accurate productivity measurement

Tracking productivity by project is crucial for consulting firms. It helps in understanding which projects are profitable and which are not, and which employees are meeting utilization and billable hour goals — allowing for better decision-making.

Detailed reporting

An upgraded ERP system can generate detailed reports including metrics such as hours worked, utilization, realization, tasks completed, and milestones achieved compared to other projects or employees.

Performance analysis

By analyzing these reports, firms can identify patterns and trends. For example, they might discover certain types of projects consistently take longer than expected. Seasonality for employee time off and holidays becomes more transparent.

Streamlined operations

An ERP system with project management and payroll functions can streamline many day-to-day operations of a consulting firm.

Single source of truth

With all data housed in one system, there is no need to switch between different software for project management and payroll. This reduces the risk of data discrepancies and keeps everyone working with the same information.

Time savings

Automating tasks such as time tracking, payroll calculations, and reporting writing can save significant time. This allows employees to focus on more strategic activities rather than administrative tasks.

Scalability

As consulting firms grow, their needs become more complex. An integrated ERP system can scale with the firm, providing the necessary tools and features to manage larger projects and more employees. More complex ERPs can handle consolidations, which is especially helpful if your company is acquisitive.

How CLA can help with your ERP selection

CLA can conduct a thorough assessment of your organization’s ERP needs. This includes understanding your transaction volume, specific reporting requirements, and integration needs with other systems.

Based on the needs assessment, CLA can recommend suitable systems. Our experienced professionals can oversee the installation and initial setup, including application development and analytics.

Contact us

An enterprise resource planning (ERP) system may be a better option than basic financial management software. Complete the form below to connect with CLA.