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ERP for trading business.  ERP for warehouse management / distributors

ERP software Scope.

The following are some key business processes (or procedures) which can be managed using ERP software.  In ERP parlance, they are referred as ERP modules.

Some of these, or all of these, modules may be applicable in your organization, depending on the business requirements.


This is a general list of major input and output.

 1.    Security Module

 1.1.  Masters:

1.1.1.    User Manager.

1.1.2.    User group master.


1.2.  ERP features:

ERP is multi user, multi tasking ERP software.  Multi-level security based on User Group and User Level.

1.3.  Create Login id and password for each user.

1.4.  Assign permissions.  Map each user with menu / submenu.

1.5.  Restricting user access with login and password.

1.6.  Role based access & password.

1.7.  Audit trail: ERP ensures accountability of users.  Work done by individual users can be easily tracked because all transactions capture the users name automatically.

1.8.  Automatic Audit Trail helps top management to know who has updated Masters or transaction and when.

1.9.  Each menu and submenu can be locked (allow / deny) including MIS (Management Information System) reports to individual user in a very user friendly screen with tree structure and check box facility.


2.    Accounts Module – General Ledger Accounts


2.1.  Masters:

2.1.1.    Account Group Master.

2.1.2.    Subgroup Master.

2.1.3.    General Ledger Account Head Master with Tax, Bank, Cash bifurcation.

2.1.4.    Detail Account Master.

2.1.5.    Narration Master.

2.1.6.    TDS (Tax Deducted at Source) and % fields in the supplier / address (TP) masters.  Automatic posting in GL.  ERP will create a JV automatically.


2.2.  Transactions:

2.2.1.    Cash receipt voucher.

2.2.2.    Bank receipt voucher.

2.2.3.    Cash payment voucher.

2.2.4.    Bank payment voucher.

2.2.5.    Service-tax payment (for excise link).

2.2.6.    Journal Voucher.

2.2.7.        Contra-entry voucher.

2.2.8.        Credit Note.

2.2.9.        Debit Note.

2.2.10.      Expense PO (for service provider, optional).

2.2.11.      Expense voucher (for service provider bill booking).

2.2.12.      Adjust unlink receipt with open sales invoice.

2.2.13.      Adjust unlink payment with open GRN (Purchase bill / expense bill).

2.2.14.      Closing balance for master data (debtor, creditor, and GL accounts).

2.2.15.      Rate of depreciation (as per company act).

2.2.16.      Rate of depreciation (as per I-Tax act).

2.2.17.      Asset installations slip.

2.2.18.      Asset sale transaction. (For asset register and deprecation register).


2.3.  Key MIS reports:

2.3.1.        Trial Balance.  Option of various kinds of formatting, such as - GL wise Tr. Balance.  Sub-group wise Tr. Balance.  Group and GL wise Tr. Balance.  Group and sub-group wise Tr. Balance.  (Option of T- format = only closing balance).

2.3.2.        Sub-ledger trial balance. (Supplier / customer).

2.3.3.        Consolidated reports of multiple locations for one company in Accounts Module.  E.g. ERP gives factory wise or branch wise plus consolidated for the head office.

2.3.4.        Cash Book.

2.3.5.        Bank Book (supports multiple banks) with receipts, payments & contra filters.

2.3.6.        Expense voucher register.

2.3.7.        Journal Voucher register.

2.3.8.        General Ledger.  (Account head wise or all accounts with details under General Ledger). Filter available for amounts < than, > than and =.

2.3.9.        Credit note register.

2.3.10.     Debit note register.

2.3.11.     Contra-entry register.

2.3.12.     Fixed Asset register.

2.3.13.     Depreciation schedule (as per company act).

2.3.14.     Depreciation schedule (as per Income Tax act).

2.3.15.     Profit & Loss account. (GL wise and sub-group wise).  For multi-location user can make consolidated P & L report.

2.3.16.     Balance Sheet.  (GL wise and sub-group wise).

2.3.17.     Bank reconciliation statement.


Exceptional MIS Reports


Dash Board:  This will give at a glance the highlights of certain figures to the top management viz. purchase, sales, money receivable, money payable, bank balance, etc. 



2.4.  ERP features:

2.4.1.    Automatic posting in respective G. L., from goods inward and sales invoice, etc.

2.4.2.    TDS procedure takes care of automatic TDS posting.

2.4.3.    Service tax procedure takes care of automatic posting in related excise ledger.

2.4.4.    Help of Standard Narration master saves time to enter voucher.

2.4.5.    All reports with drill down facility down to transaction level.


3.    VAT / Sales Tax Module

Key MIS reports:

3.1.  ERP takes care of all VAT (Value Added Tax) / CST (Central Sales Tax) related procedures and the same is linked with other relevant modules.  The same is customized as per the rules applicable.


Capturing from various transactions taxes details such as Sales Invoice, GRN (Goods Receipt Note), Sales RGN (Sales Return Goods Note, GIN (Goods Inward Note material from subcontractor etc.

3.2.  Capturing VAT / CST / Service tax components in

3.2.1.    PO, GRN, JO, GIN, Exp, PO, Exp. Voucher, etc.  Can default from item master.

3.3.  Sales Tax – VAT & CST statements

3.4.  Link to the GL (General Ledger Accounts).

3.5.  Store CST number / TIN number etc. on the masters.  In Invoice, ask for TIN number of consignee and display on invoice.

3.6.  C Form tracking – Sales

3.7.  C Form tracking – Purchase


Material Management (MM) Module

This includes the following business processes

·         Inventory Management Business process

·         Purchase Business process (Local procurement within India)

·         MRP (Material Requirement Planning) with drill down to last child level

·         Import Purchase Business process


5.    Inventory Management Business process


5.1.  Masters:

5.1.1.    Unit-of-Measurement (UOM) Master.

5.1.2.    Category Master / Subcategory Master / Sub-group master.

5.1.3.    Item Master.        Raw Material (Bought out) Item Master and list.        Packing Material Item Master and list.        Factory Made (SFG or Semi-Finished) Material Item Master and list for WIP inventory.        Finished Goods Item Master and list.

5.1.4.    Main Location Master – (sub-contractor location).

5.1.5.    Sub-location master (stores, shop floor) and subcontractor location.


5.2.  Transactions:

5.2.1.    GRN or Goods Receipt Note.  Linked to Stores as well as creditor accounts. . 

5.2.2.    Stock transfer challan.  For transferring material from one location to another location.

5.2.3.    Stock Transfer Challan - material issued to shop floor link to the Work Order as per BOM.   (Optional).

5.2.4.    Material Issue Note (MIN) to consume / material from a ‘given’ location.

5.2.5.    Stock Adjustment (SAN) to increase or reduce stock from a given location.  This transaction is useful to get match physical inventory with stock reports.

5.2.6.    Physical stock slip to enter actual stock in a given location.

5.2.7.    Closing balance master entry (as of cut-off date, one time entry).

5.2.8.    Conversion process Purchase return for non-excisable goods or Return to Supplier.  RTV.  This is linked with the material received and accounts entries are automatically generated by ERP.  This will debit the supplier in supplier ledger.  Or User may create Tax Invoice (sales -for excisable goods)


5.3.  Key MIS reports:

5.3.1.    List of category, sub-category, and sub-group. 

5.3.2.    GRN register (list) of items under “inward inspection".

5.3.3.    Stock Transfer Challan register (STC) - Filter provided for ‘normal’ STC and STC with Work Order.

5.3.4.    MIN (Material issue note) register.  (Location wise).

5.3.5.    SAN (Stock adjustment note) register. (Location wise).

5.3.6.    Stock Statement for all types of material as well as WIP, a given period.        With quantity (location wise and category wise filters).        With quantity and Rate (location wise and category wise filters).

5.3.7.    Item Ledger (location wise)        With quantity (location wise and category wise filters).        With quantity and Rate (location wise and category wise filters).        Item ledger summary gives the stock of material at all locations – Drill down to ledger for any given location.

5.3.8.    Physical stock and system stock (book stock) variance report.

5.3.9.    Stock Valuation report.  (With option to generate WAR – weighted average rate).

5.3.10.  RTV Register (Return to supplier – non-excisable items).

5.3.11.  Item List.  (With option to select any or all fields from item master).


5.4.  ERP features:

5.4.1.    Various cost rate stored on Item master if required, such as Weighted Average Rate, last pure purchase rate, etc.

5.4.2.    Conversion Factor (relation between Purchase UOM and Issue UOM).  Payment UOM and Payment conversion factor.

5.4.3.    Optional Online link with picture of an item (.JPEG file).

5.4.4.    Optional hyperlink with an AutoCAD drawing.

5.4.5.    ISO 9000 Facility to keep material in HOLD location – i.e. item under inspection, QC person can login and enter Accepted / Rejected Quantity to transfer material to Stores.  Separate ledger shows item in Hold, Stores and Rejection location. 

5.4.6.    Lot number / Batch number / Serial number / heat number tracking of inventory.  (Optional).

5.4.7.    For FMCG products user can store Inner Box / Outer Box data for shipping, or volume / weight of the box on item master.  (Optional).

5.4.8.    Automatic calculation of landed-cost of item received and updating the same on master for valuation purpose.

5.4.9.    Just-in-time (JIT) inventory management by linking the MRP (material requirement planning) module and inventory module.

5.4.10.  Pending list of returnable items - RTV (return to Supplier with auto debit feature).

5.4.11.  Item wise consumption.


6.    Purchase & Pre-purchase Module


6.1.  Masters:

6.1.1.    Supplier Master (Supplier List).

6.1.2.    Supplier Type Master.


6.2.  Transactions:

6.2.1.    Purchase Requisition (Linked further to Purchase enquiry).

6.2.2.    Purchase enquiry.

6.2.3.    Purchase quotation.

6.2.4.    Preparing Purchase Order.  This can be saved as .PDF file and email to Supplier.

6.3.  Key MIS reports

6.3.1.    Purchase requisition Register.

6.3.2.    Purchase Order Register.

6.3.3.    Purchase Order status Register with optional alert flag – when delivery period elapsed, P.O. being highlighted.

6.3.4.    Creditor Ledger.

6.3.5.    Supplier master list.

6.3.6.    Supplier Performance Rating / Supplier Rating based on quality, delivery

6.3.7.    Warning letter generation based on poor performance/service.


6.4.  ERP features

6.4.1.    Auto transfer of Rejected Quantities to rejection stores location.

6.4.2.    Link to payment voucher with required validation to the GRN (Goods Receipt Note).

6.4.3.    Item specification document as per ISO 9000 requirements can be linked to PO (.pdf) file; Drawing number, etc. can be shown automatically.

6.4.4.    Capturing of Excise, Cess and S & H Education Cess information

6.4.5.    Item 'accept / reject' quantity to be put by a separate password - by QC person.

6.4.6.    Purchase officer can make PO based on Material Requirement Planning report, or based on ROL based report. 

6.4.7.    Purchase Indent ‘Automatic’ alert to Purchase Department.

6.4.8.    Purchase Order ‘short-closed’ facility.

6.4.9.    Purchase Order Revision Provision. (Amendment).


7.    MRP - Material Requirement Planning Module / Supply Chain Management (SCM)

This module is applicable for the Finished Goods (products), where the first level child item is shown.

7.1.  Transactions:

7.1.1.    Sales Order (Export or Domestic) or Projection based input.

7.1.2.    Sales Schedule – from date and to date and quantity given by customer


7.2.  Key MIS reports:

7.2.1.    Material Requirement Plan

7.2.2.    ROL based Material Requirement report (items below Re-Order Level)


7.3.  ERP features:

7.3.1.    Pre-requisite: Customer Master. Item Master. Customer Master. BOM Master

7.3.2.    Purchase Requisition (purchase indent) can be prepared based on the MRP report – shortage quantity MIS.

7.3.3.    MRP based on the ReOrder Level (ROL).

7.3.4.    MRP considering stock in hand.

7.3.5.    Automatic calculation of ROL depending upon consumption.


8.    Import Purchase Module


8.1.  Masters:

8.1.1.    Foreign supplier Master (Supplier List).

8.1.2.    Foreign supplier type Master.


8.2.  Transaction:

8.2.1.    Import purchase Order for foreign supplier (in foreign currency).

8.2.2.    Import GRN (Goods Receipt Note) when material is received from foreign supplier (in foreign currency).


8.3.  Key MIS reports:

8.3.1.    Import Purchase order register

8.3.2.    Import GRN register – supplier wise information        Import GRN register – item wise information.


8.4.  ERP features:

8.4.1.    Capturing custom duty, CVD, Edu.  Cess, etc, and other relevant information in ERP.

8.4.2.              Indian Rupees and Foreign currency exchange rate stored at the time of importing.


9. ISO 9000 – Quality check


10.1.              Quality check for inbound material.  The Goods received with respect to purchase order are kept in a 'HOLD' location or location for material under inspection.  The stores will enter challan quantity and received quantity.  The QC inspector will reopen the GRN with his / her password and enter the accepted quantity.

10.2.              Quality check for outbound material / Finished Products.  At the time of shipping, QC check and relevant certificate can be fetched as standard word document file.


Order Fulfillment Module

1.     CRM – Customer Relationship Management

2.    Sales Module.


15. CRM Module (Customer relationship management) and pre-sales module.


15.1.              Masters

15.1.1.  Marketing Master – Commercial terms.

15.2.              Transactions

15.2.1.  Sales Enquiry.

15.2.2.  Sales Quotation (as per ISO format).

15.2.3.  Internal Order Acceptance (Internal ORI).

15.2.4.  Order Acceptance or OA or Sales Order, (Customer Purchase Order link).  Order Receipt Information (ORI). [With Sales Schedule -Optional]

15.2.5.  Proforma invoice (optional).

15.2.6.  ORI status entry by Marketing/Production/Dispatch Department

15.2.7.  Quotation


15.3.              Key MIS reports

15.3.1.  Enquiry Register.  Automatic report of enquiries for which quotation not given.

15.3.2.  Quotation Register.  Automatic report of quotation for which order not received.      Automatic Pending Quotations Report (Quotation given but order not received).

15.3.3.  Order Acceptance (Sales Order) Register.  ORI register – (i) All; (ii) Open; (iii) Used; (iv) Amended; (v) Booked; and ((vi) Terminated.      Automatic Pending Orders Report (order received but not dispatched).

15.3.4.  Proforma invoice register.

15.3.5.  Customer rating based on share of business, payment promptness.


15.4.              ERP features      State wise ‘Road permit’ info. (Master).


15.4.2.  Sales Officer wise Order booking.

15.4.3.  Multiple contact names for one customer can be stored with their individual email id and cell number.  This helps in follow-up with the right person.

15.4.4.  Sales schedule linking (optional).


16.   Sales Module. (Shipping).

F. G. inventory (dispatch) and sales accounting.


16.1.              Masters

16.1.1.  Customer Type Master.

16.1.2.  Customer Master.

16.1.3.  Enquiry type master.

16.1.4.  Delivery mode master.

16.1.5.  Sales coordinator master.

16.1.6.  Officer Master (engineer or staff name can be attached to customer.


16.2.              Transactions

16.2.1.  Commercial Invoice

16.2.2.  Sales Invoice.  Preparing Challan cum Sales Invoice (CCI)      Tax Invoice (Domestic).  Link to Order Receipt Information (ORI)/Internal ORI (Projection ORI for stocking)      Scrape sales Invoice.      Trading Invoice.  (Optional)      Invoice with zero sales value (free samples).  Complementary.      Purchase return invoice.  (For excisable material returned to supplier).

16.2.3.  Sales Return transaction.  Goods returned from Customer.

16.2.4.  Automatic Inspection Report (QC) for finished goods along with sales invoices (ISO 9000).

16.2.5.  Replacement Challan non-excisable (linked to sales and RGN).

16.2.6.  Stock Transfer Invoice.  (To transfer material to own stock locations, such as branch, franchises, etc.).

16.2.7.  ‘Repairing Invoice’ (Sales bill towards repair service charges).

16.2.8.  Packing Slip


16.3.              Key MIS reports

16.3.1.  Invoice register – Customer details.      Invoice register – Product (item) details.

16.3.2.  RGN (Return Goods Note) register.

16.3.3.  Transfer Invoice register (Optional).

16.3.4.  Trading Invoice register (optional).

16.3.5.  Ledger.  (Debtor Ledger).      Customer ledger.      Age wise outstanding report      Age wise overdue report

16.3.6.  Product wise invoice list.

16.3.7.  Customer Master List.  User can select fields to prepare excel file, e.g. to prepare phone book, select customer name, phone number, email id.

16.3.8.  ‘Repairing Invoice’ Register.


16.4.              ERP features


16.4.1.  Multiple Delivery sales schedule (Sales Order) Report.      Sales invoice link to sales schedule (for OEM).

16.4.2.  Replacement management – linked with inventory and sales accounting.

16.4.3.  Sales Returned Goods Note (RGN) for item received back, link to sales account and excise.

16.4.4.  Sales Invoice Link with sales order (ORI) to ensure accurate and fast billing preparation.

16.4.5.  Automatic posting to Customer Account, Excise Books, VAT / Sales Tax, and Inventory.

16.4.6.  Information about the Contact details such as multiple contact person names, telephone numbers, email id, etc., for Customer.

 19. Export Sales Module

 19.1.              Master:

19.1.1.  Country – currency master

19.1.2.  Customer Master (with country information)

19.2.              Transactions:

19.2.1.  Export Order – captures foreign customer's sales order information, and is linked to the Export invoice.

19.2.2.  Foreign Currency export invoice

19.2.3.  Form ARE 1 is prepared automatically with the export sales invoice

19.2.4.  Packing List (automatically prepared with export invoice).

19.2.5.  Commercial Invoice

19.2.6.  Export Proforma Invoice


19.3.              ERP features:

19.3.1.  Facility to enter current Exchange rate

19.3.2.  Foreign Currency Order Receipt Information (export ORI)


20.   Distribution Module for standard products sold through channel partners / distributors / stockiest / agents / franchises

 Sales through franchises / channel partners / distributors / dealers / agents / stockiest / CFA.  (Optional).

 20.1.              Dispatch Order created by Head Office to factory for dispatch of material to channel location.

20.2.              Transfer Invoice.  Preparing online Stock Transfer Invoice (to Depot / franchises / Branch transfer).  From factory to own inventory location linked to Dispatch Order.


24. Automatic email alerts module

 24.1.              Email id Master for sending auto emails

24.2.              Alerts user for items falling below ReOrder Level (ROL)

24.3.              ORI pending since defined days.  Order received but dispatch pending alert. 

24.4.              Pending Purchase Order since defined days. 

24.5.              Pending customer Bills since defined days/Months. 

24.6.              Bank balance going below defined amount. 

24.7.              Non-Moving Items. 

24.8.              Daily Sales to TOP Management.


25. Automatic SMS to mobile phone

25.1.              ERP prepares reports instantly which can be exported to MS Excel file.  Now this excel file can be sued to send SMS to mobile directly, but SMS text can change dynamically, as per the work sheet column data.

25.2.              B2B or B2C communication anywhere anytime from ERP.

25.3.              SMS Gateway is designed to integrate seamlessly with ERP.


28. Multi-location



28.1.              Remote Connection from another computer using Internet.

28.2.              ERP also supports Remote Login where user can access ERP Server using Internet.


29. Payroll and HR


29.1.              Master

29.1.1.  Employee master

29.1.2.  Earning heads & deduction heads Master

29.1.3.  Department master (Cost Center)

29.1.4.  Designation master

29.1.5.  City master

29.1.6.  Bank master

29.1.7.  Bank-Branch master


29.2.              Transactions

29.2.1.  Attendance – The number of days present by an employee will have to be punched in the system by the concerned official of the HR Department.

29.2.2.  Pay slip

29.2.3.  Monthly Deductions.

29.2.4.  Income Tax Monthly Challan Entry

29.2.5.  Income TAX Quarterly Acknowledgement Entry


29.3.              Reports

29.3.1.  Employee list

29.3.2.  Payroll Register

29.3.3.  Earning head wise register

29.3.4.  Deduction head wise register

29.3.5.  Attendance Register

29.3.6.  ESI Report.

29.3.7.  PF Report.

29.3.8.  Leave Encashment Statement.

29.3.9.  Professional Tax [Professional Tax] Statement


29.4.              ERP features

29.4.1.  Daily wages, monthly wages – salary calculations.

29.4.2.  Attendance types – absence, paid leave, unpaid leave, etc.

29.4.3.  Loans and advances to employees

29.4.4.  Employee type – manager, operator, etc.

29.4.5.  Automatic calculation of income tax in pay-slip every month based on Earning and Deduction feed into the system.

Supply chain management:

A big trend is for organizations to blend their operational functions under the umbrella known as supply chain management. Often, the first two functions to merge are purchasing and inventory management.

So, as a purchasing professional, you must understand inventory management principles to remain valuable.

(1) You must know how much inventory to have on hand to ensure continuity of supply in the event of an uncharacteristic increase in either demand and/or lead time. This quantity of inventory is called the safety stock.  


(2) You must know when to reorder materials for inventory. Generally, this point in time is determined when the quantity of materials in stock decreases to a certain level, called the reorder point. The reorder point is determined by the formula:


ROP = Reorder Point
SSQ = Safety Stock Quantity
QUD = Quantity Used Daily
ALT = Average Lead Time (in days)

(3) You must know how much to order. A complex mathematical equation determines the Economic Order Quantity, or EOQ. The equation recognizes the tug of war between acquisition costs and inventory carrying costs: when you order bigger quantities less frequently, your aggregate acquisition costs are low but your inventory costs are high due to higher inventory levels. Conversely, when you order smaller quantities more often, your inventory costs are low but your acquisition costs are higher because you are expending more resources on ordering. The EOQ is the order quantity that minimizes the sum of these two costs.

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