What is Material Resource Planning?

Procurement of the material is a critical task. If not planned properly, it always results into over-stocking of material or shortages. In today’s competitive scenarios businessmen can’t afford to block their funds for excess stocks or run out of schedules because of shortage of material.

 

In trading activity, the material handling part is comparatively simpler as that can be directly liked to buffer quantity / re-order level. By setting this, the ERP system can send alerts & trigger the procurement process. However, in manufacturing scenarios the process of deriving the exact requirement of raw material itself is a challenging task. This is because the manufacturing processes are comparatively complicated, may contain multiple level Bill of Material and can have multiple Sales Orders to be executes as per the dispatch schedules. This makes it essential for the Manufacturer to have a very efficient ERP system which can derive the exact shortage quantities for the required raw materials to meet the dispatch schedules as per Sales Orders. No doubt, it’s a challenging task and many of the ERP systems have failed to deliver the accurate shortage figures for Raw Material because they do not consider many of the practical aspects in Material Planning.
In order to make the production plan, you need to divide your sales orders into Work Orders (Production Work Order). In some cases, the Sales Order is same as Work Order. An ideal system for Material Resource Planning considers the finished goods or sub-assemblies mentioned in the Work Order. This selection can be for one Work Order or Multiple Work Orders. This means that Finished Goods or Sub-assemblies mentioned in the Work Orders are to be considered with their respective Bill of Materials and the Raw Material requirement is derived. This requirement of course is multiplied with the quantities of the respective Finished Goods or Sub-Assemblies. The systems thus tells the total required quantities of the required list of Raw Materials. It is obvious to consider the closing stock of those respective raw material available in stores which is to be deducted from the total requirement. In case of any of the Purchase Orders already raised for some of the Raw Materials, the respective quantities are further deducted to derive the net shortage. There is one more parameter you need to consider before placing the orders for shortage quantities of the Raw Material Items. That is the buffer stock needed for some of the stock items. In that case the buffer stock quantities are added to the net shortage quantities of those items.
This gives the correct picture of net shortage which is derived for planning the production activity for given Work Orders. Some of the ERP systems provide automatic generation of Purchas Orders foe Raw Material Items for the required shortage quantities.

GST CHALLENGES FOR SMES

n the history of Indian Taxation rules, a major change is expected to come. Everyone is eager about one buzzword GST which will be made applicable from 1st April 2017.

 Goods & Service Tax is something which is going to bring turmoil in Indian taxation and businesses.  It is not just about change of taxation or taxation structure but a lot more than that. Many of the businessman look at it as simplification of the taxes. No doubts about it because GST is going to eliminate Excise for Mfg, Excise for traders, VAT, Service Tax and probably some local taxes to avail a single window of taxation. But that is a half piece of information. The changes are not just limited to the taxation structure, but also the way you submit the tax information to government. That is going to have a bigger impact on role of the computerized systems in taxation. This is a primary element that is missed out by many of the businessmen which either they are not aware of or have not understood the real complexity of GST!!

SME sector is by and large unorganized sector especially related to accounting, taxation & MIS. Most of them use Tally Accounting Software but still miss out on using Tally as a system. Rather they rely on person driven MIS, may it be Accountant or CA or Tax Consultant. Till date a ‘software system’ was rarely a necessity and was more a small tool used for calculations prepare some daily reports and get the accumulated sales and purchase figures required for tax returns. The ‘software system’ is rarely used for keeping check on taxation in day to day operations. This factor is going to be changed upside down with implementation of GST!!!

Very few people might be knowing that the stringent part of utilizing GST is not actually assessing the GST values but using the GST portal and getting INPUT CREDIT of GST. We all know that most of SME owners are prompt in claiming input credits in their tax returns but at the same time are reluctant to submit all Sales invoices and output taxes. This might be yielding some ‘cushion’ in the earlier VAT or Service Tax returns. But that won’t be possible henceforth. This is because unless your Input Credit claim is supported by the Sales Invoice entry of your supplier, your credit value will not stand valid. This is really serious especially for businesses whose gross margins per transaction are less than the GST value of that transaction. Suppose a distributor is working on 5% gross margin and he isgetting his supplier invoice with 18% GST, then it will be a direct 13% loss in that transaction if the same is not uploaded by the supplier. This factor alone will underline the necessity for SME owners to be on their toes to check the validity of the input credit claims. In other words, they need to be equipped with their accounting and inventory management software – Tally. They need to use Tally.ERP9 on real-time basis and just not for the sake of making entries. GST is simple, alright but it has become a truly interdependent activity. Till date the industry has seen this interdependent phenomenon in TDS. However that factor never had a hit on indirect taxation. This was primarily because the State & Central Govt. departments were not equipped with effective portal systems and therefore could not make any compulsions. Now the situation is changed already. Central Government has made it clear that everything will be based on GST portal, leaving no escape routes for the taxpayers to give any excuses. It is high time for SMEs to be system oriented and enter into ‘Realtime’ mode!!! ON one hand Hon. PM has started cracking the ‘cash accounting system’ that makes mandatory for any businessman to take financial transactions through bank and on another hand there will be a system which will make all transactions in see through mode and exposed for tax authorities. our efficient business management software such as Tally has a bigger role to play in this scenario. Not only Tally will prepare your GST returns in time but will bring the more discipline that is required in ‘ERP mode’ which is a much needed factor amongst the SMEs.

Bharat Goenka, 49, was the unlikeliest of software product founders. In 1986 he, the son of Marwari textile businessman S.S Goenka, coded up a fairly functional accounting software package – Tally – after listening to his father bemoan the lack of an easy-to-use software that could handle the millions of variations among small and medium Indian businesses. In the era of Foxpro & Dbase development platforms, ‘coding’ of accounts was an essential obligation for the user. However, young Bharat Goenka went ahead to develop India’s first Codeless Accounting Software that made revolutionary changes in accounting field in coming years!

Tally kept on adding the complex requirements of SMEs in Accounting, Inventory & taxation in the most simplistic way, underlining its tagline ‘Power of Simplicity’

Today, Tally ERP 9 is a complete business management solution empowering around 10 Lakh businesses across the world. Tally ERP 9 helps to do your business peacefully. It makes the accounting processes such as tracking cash flow, revenue calculation and payroll easy and accurate. What more, your financial information stays secure and you can access it from anywhere with the right security code.

In short, solution like Tally accounting software is a great investment for any small business. Tally.ERP 9 has all the features required for high performance including remote access, audit and statutory compliance services, an integrated support center and security management, all focused on delivering peace of mind. Be it a startup, an entrepreneurship or an established business, Tally is a much welcomed and sought after software application for business management. Prism has witnessed and partnered in Tally’s growth right from a small accounting software solution to an Enterprise Class Business Management Software Solution. We provide Tally ERP 9 customized solutions and tally services in Pune for all type of organizations. Prism enjoys the Five Start Tally Partner’ status delivering not just Tally product & services but Complete ERP solutions for many verticals of Industries. Prism has a qualified and experienced team that can offer requirement specific ERP solutions on Tally by customizing Tally on its internal development platform. Every business needs to incorporate changes in business processes, controls etc along with the growth in business. Tally services which we provide have regular product updates to ensure that your Tally ERP 9 caters to your ever changing business requirement. We provide complete support on Tally. We have ready to use solutions on Tally software for various vertical segments.