Overcoming Accounting Challenges In Life Sciences Organizations With Cloud ERP Solutions
As is the case with nearly every major industry, the COVID-19 virus has forever transformed the ways in which the health and life sciences industries operate. As we enter year three of the pandemic, industry players have grown accustomed to the digitalization of banking interfaces, automation of billing, integration to supplier and distributor platforms, and collaborative work amongst teams. Now more than ever, life sciences companies must be able to manage business operations with speed and agility. Finding the right cloud ERP system is critical for industry success.
Shifts in the Life Sciences Industry
During these difficult times, the life sciences industry has emerged as a beacon of cooperation, resilience, and hope for global communities. As tenacious as the sector has been, the health and life sciences industry has faced its fair share of challenges—major disruptions in global supply chains have had a lasting impact on clinical development.
Additionally, lockdown requirements have stunted clinical trial development and some companies have struggled to provide patients with adequate virtual care. These challenges have had—and will continue to have—serious implications for business financials and accounting within the life sciences space.
Impacts on Accounting and Reporting
While the life sciences industry is showing good signs of an economic recovery, there are several factors that could continue to pose problems for accounting and reporting teams.
R&D Hang Ups
Certain FDA regulations and guidelines have been prolonged because of the pandemic. Regulatory delays have the potential to disrupt the entire R&D process, leading issues with product application reviews, contractual agreements, and problems with revenue recognition.
Uncertainties pertaining to the pandemic have led to widespread forecasting challenges (want forecasting tips? Check out our free Five Forecasting Best Practices ebook.) Many life sciences organizations have had to compensate by mapping multiple scenarios and estimating forward-looking cash flows based off indefinite factors.
Impairment of Assets Issues
The impairment tests for long-lived assets, intangibles, and goodwill have undoubtedly been skewed by the pandemic. Going forward, impairment testing for internal and external assets will continue to be a challenge for accounting teams as they attempt to develop cash flow projections and accurate forward-looking models.
There are countless other accounting factors affected by current circumstances, from contract renegotiations and liabilities assessments to general stock market volatility. In short—these are trying times for life sciences financial reporting and accounting teams.
Luckily, an agile cloud Enterprise Resource Planning (ERP) solution can help life sciences businesses navigate through the unpredictable marketplace and stay on top of essential accounting and reporting operations.
What is a Life Sciences ERP Accounting System?
ERP systems have been around for many decades. In their beginnings, this software was primarily used by enterprise organizations for manufacturing processes. But since the widespread adoption of internet, ERP systems have expanded dramatically in their application, equipped with industry-specific features and end-to-end business management solutions.
Today, ERP accounting systems are used by a host of life sciences organizations, from biotechnology and pharmaceutical sciences to medical devices and diagnostics. Many of the top ERP solutions are outfitted with life science-specific features and functions such as:
· Healthcare, FDA, and GMP regulation tracking and compliance controls
· Analytics and reporting alignment
· Procurement management
· Serial and lot tracing capabilities
Modern ERP accounting systems enable you to automate essential functions, encourage collaboration, and allow your business to scale up for success.
What is a Cloud ERP Solution?
Traditional, “on-premise” ERP systems are generally hosted on private servers and maintained by IT specialists. A cloud-based ERP solution, however, is hosted remotely through an online data center.
Cloud ERP solutions allow users to store, manage, and maintain business data all within one central platform. Because they are web-based, these platforms can be accessed anytime, anywhere. Cloud-based ERP systems offer simple data consolidation and improved reporting functionality. Perhaps one of the greatest benefits of cloud ERP solutions is their ability to scale as your business does, whether that’s from expense management in R&D to pre-commercialization production to distribution of commercial products.
No matter what size your life sciences company is, cloud ERP solutions add essential value and will completely transform the way you do business.
Finding the Right Cloud ERP Solution for You
A cloud ERP solution will enable you to oversee company financials, supply chains, manufacturing, and general operations functions in a unified application. But with so many solutions available, how do you know which one is right for your business?
At FRC, we offer customized implementation and consulting services for two of the most trusted ERP providers in the world—NetSuite and Sage Intacct.
NetSuite vs. Sage Intacct
Both of these best-in-class ERP accounting systems offer essential life sciences solutions, however, they do vary in terms of services and features.
NetSuite was the first ever cloud-based ERP system to come onto the market, providing users with a complete business management platform. Over the decades, NetSuite has expanded its scope of services to include critical accounting functions, product distribution, manufacturing, customer relationship management (CRM), and human capital management (HCM) features (for genetic testing and research companies, see doc.) With its range of functions and global capabilities, NetSuite is considered ideal for mid to enterprise-level organizations.
Sage Intacct, on the other hand, is a more defined cloud ERP system specializing in accounting and financial management. Sage Intacct is renowned for its stress-free implementation and customizable accounting management capabilities. Recent features have expanded Sage Intacct’s reach to include end-to-end operational management solutions. Sage Intacct is a great option for small to mid-sized companies.
Driving Success with FRC
Choosing the right technology is essential to the growth and success of your life sciences organization. At Frank, Rimerman Consulting, we specialize in helping your team select and implement accounting and business software solutions that meet your unique business needs and extend the usage as your organization scales to new operational requirements. Our life sciences solutions experts can help you:
· Implement Procure to Pay processes with spending controls tied to budgets.
· Manage the complexities of FDA compliance (specifically readiness for 21CFR Part 11).
· Transition from R&D to clinical production to commercialization.
· Adopt segregation of duties and systems controls ahead of an IPO road show and through the initial public offering.
· Gain real-time access to analytic data, financials, and global consolidations. Contact our team of software solutions experts to find the optimal ERP solution for your business.
Contact our team of software solutions experts to find the optimal ERP solution for your business.