How Built-in ERP Best Practices Help SMEs Save Time and Costs

Key Takeaways

• Gain an immediate competitive advantage by implementing the expert-tested business processes included in modern ERP software.
• Reduce your implementation time by adopting the ERP’s pre-built workflows for core functions like finance and inventory.
• Free your team from repetitive tasks by using standardized processes, allowing them to focus on strategic growth.
• Discover that modern ERPs come with built-in solutions for specific country regulations, like US lockbox banking.

These high costs and complexity kept many smaller firms away.However, the technological and organizational aspects of the business environment are becoming more sophisticated and demanding. SMEs face pressure to operate more efficiently, compete with larger players, and respond to customer expectations for speed, transparency, and service. Many are expanding into new markets, managing hybrid workforces, or adapting to supply chain volatility — all of which demand a more structured, technology-driven approach. As a result, SMEs are beginning to realize that software solutions with limited functionality — often aimed at small businesses — can only support their growth up to a point.

As an answer to this challenge, the ERP landscape is changing. Major ERP vendors like SAP, Oracle, Microsoft, and NetSuite have recognized this shift and not only offer new solution packages or extend the current ones to midmarket companies, but also embed standardized best practice business processes into their offerings.

In this article by ACBaltica, a company with 20 years of experience implementing SAP ERP solutions, we’ll look into ERP’s embedded best practices and explore how they help SMEs streamline operations, cut costs, and speed up ERP implementations.

What Exactly Are ERP Best Practices and How Do They Benefit SMEs?

ERP best practices are essentially the standardized, proven operational processes pre-packaged within modern ERP software. 

Large on-premise ERP projects traditionally involved extensive customization to match a company’s existing processes. Today, however, another approach is gaining momentum in the philosophy of B2B tool implementation — a shift away from heavy customization.

This new approach focuses on leveraging out-of-the-box best practices and configurations that meet the needs of most businesses with only minimal adjustments. It dramatically reduces costs and accelerates the implementation timeline. Rather than spending months configuring an ERP system from scratch, companies can adopt the preconfigured processes mentioned earlier relatively quickly. 

For example, GROW with SAP, a solution package designed for midmarket companies, brings the capabilities of SAP’s flagship S/4HANA ERP within their reach. SMEs choosing this package get access to hundreds of out-of-the-box pre-built processes. 

SAP has been perfecting these processes for over 50 years, drawing on its global experience across various industries. It’s an immediate competitive advantage to get your hands on this plethora of industry knowledge.

Instead of reinventing the wheel, an SME can adopt these ready-made business process templates that reflect what has worked successfully for many companies in their industry or functional area. In other words, the ERP software arrives with built-in process blueprints — from processing a customer order to running payroll or closing the books — based on many years of industry experience and refinements. There’s no need to spend resources analyzing and designing, say, an inventory management process from scratch — the ERP’s default process is likely built on industry standards that minimize errors and inefficiencies. This significantly reduces the time and effort needed to get up and running. 

In fact, using pre-configured best practices and tools can speed time-to-value for an ERP project. Pre-built best practices also reduce risks: since these processes are tried-and-true, an SME is less likely to hit major pitfalls or compliance issues compared to designing custom processes with no roadmap. 

How ERP Best Practices Deliver Value: Industry Efficiency, Easier Compliance, and Practical Solutions

Modern ERP best practices deliver value on multiple fronts. Let’s look at some of the dimensions in which standardized ERP processes help businesses save time and costs.

Examples of Best Practices

ERP best practices cater to common business scenarios that many SMEs encounter during growth. These could be cross-industry situations like rapid growth, expanding to new markets, or moving from manual processes to automation. By following the best practices built into ERP, SMEs can navigate these challenges more smoothly.

Here’s a good example of how following a pre-build process leads to improving cash flow and credit management. Many growing businesses struggle with late payments and credit risks as their customer base expands. ERP best practices often include standardized processes for credit management and collections to tackle this scenario. For instance, Basic Credit Management functionality in SAP helps a company automatically assess customer creditworthiness and enforce credit limits on sales orders. This prevents an SME from overextending credit to a customer who isn’t paying reliably — the system will flag or block new orders if a customer exceeds their limit or has overdue invoices. 

Industry-Specific Best Practices

One of the biggest advantages of today’s ERP systems is that they come with industry-specific process best practices baked in. Vendors have developed templates and process flows optimized for various industries, so an SME in, say, retail can use the system differently than a manufacturer would, each using practices proven in their field. 

Some examples include retail inventory management: retailers need to avoid excess stock sitting on shelves. ERP best practices for retail typically include automated demand forecasting and reordering workflows to keep inventory at optimal levels. By using these standard inventory management processes, retailers can reduce overstock and carrying costs while preventing out-of-stock situations. In practice, an ERP might trigger purchase orders when inventory falls below a threshold (a process honed by retail industry experience), so an SME store isn’t manually guessing when to restock. The result is just-in-time inventory that improves cash flow and minimizes waste.

Country/Legislature-Specific Best Practices

Another area where ERP best practices shine is in compliance with country-specific regulations and business customs. Running a business in the United States versus, say, Germany, comes with different requirements — from tax law to financial reporting formats — and modern ERPs include localized processes to handle these differences. This is hugely beneficial for SMEs, who often lack dedicated compliance teams. 

For example, consider lockbox cash management in the United States, which comes with S/4HANA. Many US banks offer a lockbox service where customer checks are sent directly to the bank for processing. Manually handling lockbox data can be tedious, but ERPs like SAP include a standard process as a best practice. With these processes, a company can automatically collect and process incoming payments through the bank’s lockbox files. The benefit is faster cash application and fewer errors, without the company having to develop a custom solution for bank lockbox integration.

How SMEs Can Align Their Processes with ERP Best Practices

Adopting ERP best practices sometimes requires SMEs to adjust their existing ways of working. This can be challenging — people are used to their routines, which might not initially match the vendor’s way. However, with the right approach, an SME can successfully align its internal processes to the ERP’s best practice processes, reaping the efficiency gains and cost savings we’ve discussed.

Some practical pieces of advice to achieve this alignment include:

• Understand how your processes align with what the ERP system offers: in any ERP project, the goal is to automate as much of the business as possible by using the system’s built-in best practices or other ways the solution provides. That means assessing which of your processes can be adapted to the standard options provided by the software.
• Prioritize standardized processes over heavy customization: it’s tempting to tweak the ERP to fit your old processes, but that defeats the purpose. Remember that customizations are expensive to maintain and can introduce risk. The golden rule endorsed by ERP experts is to only customize if a process is a true competitive differentiator/advantage. For all other processes, it’s best to embrace the ERP’s out-of-the-box process, even if it means changing how your team works.
  
  For example, if the ERP’s best practice is to approve purchase orders above a certain amount and your company didn’t do that before, consider adopting that control rather than disabling it.
• Leverage built-in compliance and controls: SMEs should take full advantage of the ERP’s pre-packaged compliance features. Make sure you activate and use things like tax calculation modules, electronic invoice formats, or approval workflows — they are there to protect your business and save you effort. Align your financial calendar and account structures to what the ERP best practice suggests (often aligned to common standards) so that you can use the system’s financial closing cockpit or audit report tools with minimal fuss.
  
  Essentially, trust the ERP’s process frameworks, especially in areas of legal compliance, because they have been vetted by experts. This will reduce risk for your SME (avoiding fines, etc.) and also reduce the workload on your team for things like audit preparation or regulatory reporting.

Additionally, engaging the expertise of experienced ERP integrators or partners can greatly help SMEs align with best practices. Certified implementation partners have seen many businesses through this journey and can advise where a process should be adapted versus where to stick with the standard. They can also train your staff on best practice processes and configure the ERP optimally. 

Conclusion

ERP systems no longer have to be synonymous with complexity, lengthy implementations, or exorbitant costs. Small and midsize enterprises can dramatically simplify their ERP journey by leveraging industry-proven best practices. These best practices serve as an expert-built roadmap baked into the software, guiding everything from daily invoice handling to strategic expansions, so that an SME isn’t navigating uncharted waters alone. 

The payoff is significant: implementation timelines shrink, since there’s less process design from scratch; project costs go down due to fewer customizations and rework; and the result is a system that runs efficiently and is aligned with both industry standards and local compliance from day one.

For CEOs, CTOs, CFOs, and CIOs of SMEs, the message is clear: view ERP best practices as strategic assets in your deployment. Rather than fearing that an ERP will force unwanted change, recognize that it brings improvements that can save time and money if you allow your team to adapt to them. The focus should be on leveraging those standard processes as much as possible, and only differentiating where it truly counts. By doing so, you’ll maximize the ROI of your ERP and avoid the common pitfalls of ERP projects.

Author

Alexander Kunevich, SAP FICO consultant, S/4HANA migration Project Manager at ACBaltica (https://acbaltica.com/). Over 10 years of experience with SAP products, inluding conversions to S/4HANA (Brownfield approach) in different industries.

Frequently Asked Questions

What are ERP best practices?
ERP best practices are standardized, industry-proven operational methods that are pre-built into modern ERP software. They provide a blueprint for common business functions, like managing finances or inventory, based on what has worked successfully for thousands of other companies.

Aren’t ERP systems too complex and expensive for a small business?
This is a common myth. Modern ERP solutions, especially those designed for SMEs, now focus on pre-configured best practices that dramatically lower costs and shorten implementation times. This approach makes powerful ERP capabilities accessible without the need for a large budget or extensive customization.

How do these built-in processes actually save my company money?
They save money by reducing the need for expensive, time-consuming customizations during the setup phase. Since these processes are already optimized for efficiency, they also help lower operational costs by minimizing errors, improving inventory management, and speeding up financial closing cycles.

What is one practical step to align my current operations with an ERP’s best practices?
Start by identifying one core process, such as purchase order approvals, and compare your current method to the standard workflow offered by the ERP. Instead of trying to change the software, train your team to adopt the ERP’s more controlled and efficient process, which is likely based on proven industry standards.

Can you give an example of a best practice for the retail industry?
A common retail best practice included in ERPs is automated demand forecasting. The system analyzes sales data to suggest optimal stock levels and can even trigger reorder alerts automatically. This helps retailers avoid running out of popular items while reducing the cost of holding excess inventory.

How does an ERP system help my business comply with different country’s regulations?
Modern ERPs include localized best practices that are tailored to specific national laws and business customs. For example, the system can automatically handle country-specific tax calculations or generate financial reports in a required local format. This is a significant benefit for SMEs expanding into new markets.

My team is used to our current methods. Do we have to abandon them completely?
While some process adjustment is needed, the goal is not to eliminate everything your team does. The best approach is to adopt the ERP’s standard processes for common tasks and reserve customization only for unique operations that give your business a true competitive edge. This balances efficiency with your company’s unique strengths.

How does adopting standard ERP processes reduce project risk?
Using tried-and-true processes significantly lowers the risk of project failure. Since these workflows have been tested and refined across many businesses, you avoid the pitfalls of designing a new process from scratch. This leads to a smoother implementation, fewer errors, and better user adoption from the start.

What is the significance of the “GROW with SAP” solution mentioned in the article?
GROW with SAP is a solution package specifically designed to make SAP’s powerful S/4HANA ERP system accessible to midmarket companies. It bundles the software with pre-built best practices, allowing smaller firms to gain the benefits of a top-tier ERP without the complexity and cost of a traditional enterprise-level project.

How does sticking to standard processes affect my ERP system in the long run?
Sticking to standard processes makes future system upgrades much simpler and less expensive. Heavy customizations often break during updates, requiring costly rework. By using the out-of-the-box functionality, your system remains easier to maintain and you can adopt new features from the vendor more quickly.