ERP + CRM Integration for Distributors & Manufacturers: From Enquiry to Quotation, Inventory, Dispatch and Payment
ERP CRM Integration for Distributors & Manufacturers, An inquiry for a customer from the point of view of distribution and manufacturing is the starting step in doing business.
After the client requests a certain product, the firm should look into various aspects, including price, inventory, manufacturing possibilities, credit, shipping, invoicing and payments before completing the sale.
In case when ERP and CRM run independently of each other, the whole process depends on the use of spreadsheets, phone conversations, email correspondence and repeated data entry.
Integration of ERP and CRM can tie together the customer-facing process of selling products with inventory management, finance and manufacture.
The consequence of this integration is the following workflow:
Enquiry -> Qualification -> Quotation -> Sales Order -> Inventory/Manufacture -> Shipping -> Invoice -> Payment -> Follow-Up
Contemporary ERP software systems are meant to integrate such processes as manufacturing, procurement, supply chain and finance while CRM deals with clients and sales opportunities.
What Is ERP CRM Integration?
ERP CRM Integration is the relationship between customer and sales data residing in the CRM with the operation and accounting data being maintained through the ERP software.
CRM usually controls:
- Queries
- Ledgers
- Customers
- Sales leads
- Follow ups
- Sales quotes
- Sales activity
- Customer interaction
ERP usually controls:
- Inventory
- Buying
- Production
- Sales orders
- Warehouse
- Dispatching
- Invoice processing
- Accounting
- Payment
When the two pieces of software work together correctly, the staff does not have to enter the same information back and forth between different departments.
The CRM knows what the customer wants and ERP knows if the business can deliver on that need.
Why ERP CRM Integration Is Important for Distribution Firms
Distribution companies have to handle huge catalogs of products, several warehouses, dealer relationships, several price lists, and repeated orders.
When there is no integration, sales staff will make quotes not being aware of:
- Available inventory
- Allocated inventory
- Location of the warehouse
- Latest prices
- The customer’s credit position
- Scheduling for shipment
Integration enables salespeople to use up-to-date information, while ERP will manage inventory and order fulfillment.
ERP systems are normally capable of handling quotation and order processes in addition to inventory management and warehouse activities.
Why Manufacturers Require CRM and ERP Integration
Manufacturers face yet another level of complexity.
An order by the customer may involve:
- Raw materials
- Production planning
- Bill of material
- Manufacturing capacity
- Quality control
- Finished goods stock
- Packaging
- Dispatch schedule
Manufacturing-specific ERP systems bring together production, material planning, procurement, logistics and finance to enable the operations team to work on a common platform.
The role of CRM is to include the customer and business perspective.
Both together enable the business to know:
What the Customer Wants and
What the Business Can Provide
Stage 1: Capture the Lead in CRM
This stage must begin with all leads captured in CRM.
These leads can be generated from:
- The Website
- The Phone Call
- The Dealer
- The Salesperson
- Trade show
- Google Adwords
- Existing Customer
CRM captures details like customer’s name, company, what is needed, quantity, where and when and which salesperson is assigned the opportunity.
All of this makes it one single point of beginning for the opportunity.
The lead must not be limited to WhatsApp of an employee, email inbox or notepad.
Stage 2: Qualify the Requirement
Before creating an official quotation, it is necessary for the sales team to determine if the request is reasonable.
Qualification might include:
- Product/specification
- Qualities needed
- Destination of delivery
- Time frame of purchase
- Business expectations
- Type of customer
- Relationship with company
This stage becomes increasingly crucial in B2B sales because not all requests should automatically turn into a sales order.
The CRM can log the sales process in stages including:
New Inquiry → Qualified → Quotation Needed → Negotiations → Sales Order Confirmed
Stage 3: Create the Quote Based on ERP Data
Quotation is probably one of the most valuable integration points.
Instead of searching the same information in another application, the CRM would be able to get all necessary data from the ERP.
This can vary depending on the implementation, but can include:
- Product codes
- Price lists
- Inventory availability
- Customer pricing
- Tax information
- Discounts
- Terms of payment
- Lead time
In case of manufacturing companies, the quotation can also be based on configuration, production and materials availability.
According to Microsoft, the current B2B manufacturing environment involves workflow, where the processes of quoting and order placement could still remain integrated with pricing, inventory, warehousing, and manufacturing planning.
Stage 4: Turning an Approved Quotation into an Order
When the quotation is approved by the client, the company should refrain from entering the same details again.
An approved quotation can turn into:
CRM Opportunity Won –> ERP Sales Order
The information will be:
- Customer
- Products
- Quantity
- Price agreed upon
- Taxes
- Shipping address
- Payment terms
- Scheduled shipment date
This saves on duplicate entries and the mistake of entering the incorrect number of units, customer, or price.
This allows the CRM to reflect the closed deal while the ERP handles the operations part.
Stage 5: Determine Inventory or Production Availability
If the company is a distributor, the next question might be:
Is the stock available?
ERP and warehouse management systems can manage inventory across sites and link inventory movements with sales orders and shipping. As an illustration, Oracle provides integrations that synchronize inventory information and link shipping with orders.
If the company is a manufacturer, the next question might be:
Can this order be produced timely?
The ERP system will assess:
- Stock of finished goods
- Inventory of raw materials
- Purchase needs
- Production plans
- Orders already received
- Manufacturing capabilities
This will help prevent the sales team from committing to delivery times without being certain.
Available, Reserved, and Planned Stock
It is important for companies to differentiate between their existing inventory and available inventory.
The inventory might be:
- Reserved
- Allocated
- Being tested for quality
- Scheduled for another order
- En route
- Still in production
It would be more helpful to show availability than total inventory on hand.
Step 6: Manage the Order, Picking, Packing & Shipping
Once the order is ready for dispatch, the ERP or the warehouse software can manage:
Order -> Pick -> Pack -> Ship
The CRM will not do the work of warehouse management.
Rather, it should get the key status information for customers.
Such as:
Order confirmed
Processing
Ready for Shipping
Ship
Delivered
Integrating warehouse/ERP software is usually done in a way such that the fulfillment status of orders and shipments can be synchronized.
So, the salesperson can answer the queries of the customer without calling the warehouse again and again.
Stage 7: Generate Invoice and Payment Follow-Up
The sales process does not end at shipping time.
The finance department will have to take care of:
- Generation of the invoice
- Taxes like GST
- Payment terms
- Outstanding amount
- Expected payment date
- Credit limit
- Partial payments
- Overdue invoices
ERP will continue to act as the system of record for finances.
Payment-related details can be surfaced in the CRM.
Thus, a sales rep would see:
Invoice: Rs 2,50,000
Paid: Rs 1,50,000
Outstanding: Rs 1,00,000
Due Date: 25th October
This is far more informative than asking accounts for a status update before every customer call.
Stage 8: Automate Payments and Customer Follow-Up
After finance data integration, companies can develop follow-up workflows in a structured manner.
Such as:
Invoice Created → Payment Reminder → Due Date → Late Payment Alert → Sales/Accounts Follow-Up
CRM can allocate the relevant salesperson/account manager for this purpose.
Communication can be done via:
- SMS
- Phone Calls
However, the key aspect is to ensure communication according to the payment details available in ERP systems and not in manually prepared spreadsheets.
Distinguish the Responsibilities of ERP and CRM Systems
Integration doesn’t imply that both systems must be responsible for all.
In a good architectural solution, the responsibility is normally allocated properly.
CRM system must have responsibility for:
Relationships with customers, leads, opportunities, follow-ups, and sales.
ERP system must have responsibility for:
Inventory, production, procurement, fulfillment, finance, and accounting.
The layer of integration transmits necessary information between systems.
It prevents the creation of several sources of truth.
Important Information for Synchronization
ERP CRM Integration may synchronize:
- Customers
- Contacts
- Products
- SKU codes
- Price lists
- Availability of inventory
- Quotations
- Sales orders
- Status of orders
- Status of dispatch
- Information about invoices
- Payment status
- Credit information
Not all the fields are supposed to be transferred in both ways.
Transfer only the necessary information for your workflow.
Advantages of ERP CRM Integration
In case of distributors and manufacturers, integration may assist in providing the following:
- Faster quotes
- Effective visibility of inventory
- Minimal redundancy
- Precise order
- Sales and operations synchronization
- Faster response to customers
- Enhanced visibility of dispatch
- Efficient payment tracking
- Customer history
ERP software is becoming an increasing source of truth for operations because inconsistent information, visibility, and slow decision-making result from disjointed systems.
Customer Experience Enhancements
The integration can also make customer experience better.
A salesperson can ask questions such as:
Is my product in stock?
When will it be shipped?
Was my invoice generated?
What amount of money is still owed?
Without going to other departments.
And that is how operational integration helps in providing good customer service.
ERP CRM Integration Common Mistakes
Companies should avoid:
Sync Everything
More integrations mean more complications. Connect only needed information.
Duplicate Product Masters
There should be product code and customer master data rules.
Manual Status Changes
Operational status changes should be based on ERP whenever possible, not by updating CRM manually.
Not Addressing the Problem of Duplicate Customers
There should be rules for matching customers preventing duplication of an organization within the CRM.
Bad Error Handling
Failure of synchronization should result in an alert, not in losing the data.
Automation of Poor Process
Integration can’t improve the poor process of approving, pricing, or fulfilling an order.
Define the process first.
KPIs for Monitoring
Once the CRM and ERP data are integrated, businesses will be able to monitor:
- Timing of enquiries to quotations
- Conversions from quotation
- Size of orders
- Duration of sales cycle
- Availability of stock
- Time required to deliver orders
- % of on-time delivery
- Uncollected money from customers
- Length of delays in payment
- Frequency of repeat business
- Sales per product
- Sales per salesperson
- Sales per distributor or geographic region
This provides better managerial insight than monitoring the two sets of reports separately.
Conclusion
For distributors and manufacturers, there must be no segregation between customer management and operational execution systems.
ERP CRM Integration will integrate all stages of the business process:
Inquiry -> Qualification -> Quotation -> Sales Order -> Inventory / Production -> Dispatch -> Invoicing -> Payments
CRM will provide sales representatives insight into the client relationship.
ERP will provide the business with the ability to manage inventory, production, delivery and finances.
The integration of both systems will reduce human efforts, improve precision and enhance employee data access throughout the order process.
In case your company needs ERP CRM integration, CRM customization, inventory integration, sales automation, quotation processes, dispatch management and payments management, schedule a consultation on our website. We will be able to design a workflow based on your real process of distribution / manufacturing and not vice versa.
Frequently Asked Questions
1. ERP CRM Integration – What Is It?
ERP CRM Integration involves integrating customer and sales data from CRM with operational data like inventory, orders, dispatching, billing, and payments from ERP.
2. Why does ERP and CRM integration benefit distributors?
It enables the sales team to have pricing, inventory, order, and dispatch information at hand while maintaining customers and following up in CRM.
3. Why is ERP CRM integration good for manufacturing companies?
They require the connection of customer demand to material planning, manufacturing, inventory, fulfillment, and accounting.
4. Can CRM show real-time inventory?
Yes, but only if properly integrated with ERP or inventory management system. CRM can show current or synchronized availability but not act as an inventory management system.
5. Are automated quotes possible?
Yes, a CRM system can take advantage of ERP’s product, price, taxes, and customer information for fast quote generation.
6. Can a quote automatically turn into a sales order?
Yes. The information contained within a quote that has been approved can be imported into the ERP to generate a sales order without the need to re-enter the same data again.
7. Is it possible for dispatch status to be shown in CRM?
Yes. The dispatch status from ERP or the warehouse can be synced with CRM so that the sales and customer services teams can track their progress.
8. Is it possible for CRM to reflect invoice and payment status?
Yes. The amount on the invoice, due date, balance and payment status can be reflected in CRM through syncing with the ERP or the accounting module.
9. Should ERP or CRM maintain inventory?
ERP or an inventory system would be responsible for maintaining the inventory levels. CRM on the other hand should only present the necessary information to the sales teams.
10. Can ERP CRM Integration minimize manual data entry?
Yes. This is one of its primary advantages.
11. Is integration compatible with several warehouses?
Yes, on condition that the ERP supports warehouse inventory, and the integration itself is capable of exposing necessary locations.
12. Can payment reminders be automated?
Yes. The payment status of customers in ERP system can be used to create tasks in CRM or approved workflows of customer communications.
13. How should businesses begin their integration?
With their most valuable process – typically customers, products, quotations, sales orders and order status – and then gradually move to more sophisticated workflows.
14. Is ERP CRM integration customized better than replacement of both systems?
Not necessarily. If current ERP and CRM systems work perfectly well at performing their own functions, the former option can be more suitable than the latter. It all depends on many factors such as data quality, workflow complexity, integration capabilities and others.
Disclaimer
This article was prepared with informational and educational purposes in mind. The functionality of ERP and CRM systems, methods of integration, API, inventory workflows, accounting and manufacturing processes may vary across vendors and organizations. Enterprises should take into account their systems, processes, tax and accounting requirements, security policies and other aspects before integrating ERP and CRM.