ERP for a Services Business 

By: Scott Cranford

While many manufacturing ERP solutions focus on serving the needs of companies who manufacture, often times alongside production is a healthy services business as well. This can present some challenges for certain business systems. Many solutions have the ability to manage returns, field service work, repairs, etc. But let’s look a layer deeper at some additional functionality that is critical to supporting a service based business.

Projects and Project Accounting

Companies in the Engineer to Order and Make to Order space can build to a project. Upon completion of that build, they are then responsible for the installation and ongoing service of the delivered items. A project can have a long lifespan and is the perfect vehicle to capture all of the necessary information for the ongoing service of say equipment or machinery. Projects consist of a budget, task structure, transactions like Sales Orders and Work Orders and contain all of the elements for managing complex billing scenarios.

Document Management

Service based businesses require an incredible amount of documentation to support the operations. Often times there are compliance and regulatory requirements that must be met. Contractual service levels, response times and service reporting can be extensive. Then there are the transactional documents like installation forms, service orders, delivery and customer sign off documents.

While many of these can be done online and stored directly in the ERP solution,  others are more traditional in nature and are equally important to the management of the business. Document Management and the automation of documents is a key piece of the puzzle. An ERP solution may have the ability to automatically attach documents to the appropriate project, invoice, sales order, work order or quality inspection record. The ERP solution becomes the only repository for information, whether captured in the field online or attached and stored as part of the ERP solution Document Management capability.

Billings and Revenue Management

More than invoice upon delivery of the service, a services company may have complex billing scenarios based upon milestones, final assembly and test and customer acceptance. They may have requirements for what might be called progress payments or installment billing plans. As for revenue, this too adds some complexity to the mix in that revenue may only be recognized based upon some percentage completion technique. For both billings and revenue, the accounting portion of an ERP solution needs added depth in this area to manage the various types of services offerings that companies offer.

Just a couple of quick functional things to think of for today’s services business. To learn more about best practices for the service business of your manufacturing company, please submit your contact details and a Visibility representative will follow up with you shortly. You can also click here to visit our VISIBILITY ERP solution's home page.

Topics: ERP

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