The Role of ERP in Advanced Managerial Accounting Techniques: A Conceptual Framework

Abstract

In the business literature many studies done to shed light how ERP system and advanced managerial accounting techniques team up. For quick and accurate managerial decisions and effective implementation of advanced management techniques, firms need a strong information technology infrastructure. The purpose of this paper is to search theoretically how ERP system and advanced managerial accounting techniques collaborate. Keywords: ERP, Advanced Managerial Accounting Techniques, Managerial Accounting SystemsJEL Classification: M10, M40 IntroductionToday's business environment has made inevitable for firms to have comprehensive, daily and detailed information of both market and their own operational processes. In other words, to be obtained by using emerging technologies holistic comprehensive, flexible and real-time financial and operational information is indispensable for firms high performance. ERP is precisely one of the information technologies for this purpose.As an enterprise information technology, ERP demonstrated the rapid spread and development across the World from the 1990s to now. In this process, the system that meets the specific needs of different users (in particular to increase the effectiveness and profitability of resources) and has become a complex set of computer application which integrates all processes and functions in the company and offers a holistic and integrated view by using a common database sharing.Because ERP makes data sharing in to an accurate and real-time form, operational processes are also automated in whole business. In this context, the nature of the accounting practices in this context has changed radically. With the change, the operational coordination between departments has got easier, and thus efficiency has obtained in areas such as strategic planning and management control. Efficiency is observed as increased flexibility in providing information, increased integration in accounting practices, and increased quality of financial status report and also seen as quick decision-making process, the harmonization of conflicting objectives and to standardize business processes (Colmenares, 2009: 5-6); and finally seen in areas such as an increased efficiency in commercial enterprises, facilitating the access to information, increased quality of information and supporting temporary reporting (Booth, 2000: 2 With these features the ERP can offer important contributions to Managerial Accounting Systems (MAS). Thanks to ERP, MAS facilitate budgeting applications and tracking responsibility on prepared reports. So, in our opinion, MAS effectiveness has increased dramatically by ensuring interdepartmental integration. This article examines how management accounting applications become effective and productive with the support of an ERP system and how this interaction increases firm performance. Literature ReviewThe problem of determining cost and cross-functional data reliably and quickly, particularly in manufacturing enterprises (Lea and Min, 2003: 2880), hampers the e...

Integrating S-ERP systems and lean manufacturing practices to improve sustainability performance: an institutional theory perspective

“…Social) has been improved after the integration of S-ERP systems and LM practices. This result is consistent with previous studies (Buer et al, 2021;Jituri et al, 2018;Eker and Aytaç, 2017;Powell et al, 2013a;Alaskari et al, 2014;Iris and Cebeci, 2014).…”

“…ERP systems offer accurate and real-time information for better budgeting and forecasting (Gullkvist, 2013). Advanced management accounting tools (such as ABC, BSC, TQM, JIT, Benchmarking and Target Costing) have also been introduced by organizations after the implementation of ERP (Eker and Aytaç, 2017). Thus, ERP can support LM practices implementation in the organization.…”