ERP, playing with the integration of three streams

ERP is a management system that integrates various departments and links, with the aim of making enterprise operations more efficient and orderly. Let me use vivid examples to illustrate that ERP is somewhat like a household butler, helping you arrange your family's people, finances, and things.
Why do we talk about "three streams in one"? This actually means that ERP can help enterprises closely link business flow, information flow, and capital flow together. We can imagine these three as the three channels of a family: business flow is the busy flow of people coming and going in the family; Information flow refers to the transmission of messages through various channels; The flow of funds refers to the circulation of family wealth.
ERP is like an efficient housekeeper, linking these three together to make family operations more orderly.
Firstly, let's talk about business flow. The business flow of an enterprise refers to the flow and processing of products or services within the enterprise. For example, a company that produces shoes has a business flow that includes raw material procurement, production line manufacturing, product packaging, and final sales. ERP is like a "navigation system" in this process, which can help enterprises understand the situation of each link, so as to better arrange resources and improve production efficiency.
Next, let's talk about information flow. Information flow refers to the transmission and processing of various information within an enterprise. At home, people communicate information through various means, such as message boards, phone calls, chatting, and so on. The same goes for enterprises, where information needs to be transmitted between different departments and employees need to collaborate. ERP is like a super communication tool that can transmit information more quickly and accurately, making communication within the enterprise more smooth and unobstructed.
Finally, let's take a look at the cash flow. Capital flow refers to the flow and operation process of internal funds within a company, just like how household allowance is spent and how living expenses are allocated. ERP is like a financial manager, it can help enterprises understand the flow of funds at any time and achieve orderly financial management. Thus, enterprises can better grasp their economic situation and make wise financial decisions.
In fact, the data flow in the integration of the three streams basically meets the core management concept of ERP: business and financial integration. Simply put, it is the integration of a company's business and financial data, so that they are no longer two independent parts, but rather intertwined, interrelated, and sharing information. The core of this management approach is to make data exchange between various departments and functions of the enterprise smoother and information more transparent.
The following is the practical application of business processes and financial accounting rules in the procurement, production, and sales processes in the ERP system.
In the procurement process, employees first submit a purchase request, and the procurement department then generates a purchase order and sends it to the supplier. Once the goods arrive, the order execution status is confirmed through the system, and the procurement cost is recorded in the cost account. At the same time, the system generates accounts payable records of the amount to be paid to suppliers and updates the inventory account to reflect the actual inventory situation.
In the production process, generate production plans based on market demand and inventory conditions. The production department executes plans, manufactures products, and after completion, the products are stored and the inventory account is updated. During the production process, the system gradually accumulates production costs, including raw materials, labor, and manufacturing costs.
The sales process involves generating sales orders, shipping products, invoicing, and receiving payments. Sales revenue is automatically recorded in the system, and accounts receivable are also generated accordingly. Through these processes, enterprises can track sales revenue and customer pending payments in real-time.
The entire process reflects the integrated management of business and finance in the ERP system. The cost information of procurement, production, and sales is automatically reflected in financial accounts, and accounts payable and accounts receivable can also be updated in real-time. This makes enterprises more accurate and efficient in financial decision-making and operational management.