Top 5 reasons to use person accounts with your ERP

December 8, 2017BY John Kearns

By default, accounts in an Enterprise Resource Planning application are designed for a business-to-business (B2B) model in which accounts represent companies and contacts represent individuals working at those companies.  

However many organizations interact not only with Companies, but with individuals.  In addition those interaction are often financial.   This is true for both for profit and non profit organizations.  Examples of financial transactions with individuals include:

  • Business to consumer sales
  • Membership dues
  • Student tuition
  • Ticket sales
  • etc.

Unfortunately many traditional ERPs do not support private accounts.  Instead companies  are forced to set up an individual as a company where the company name is used to house the person name.

 

Why incorporate person accounts into your ERP? 

Following are some of the top reasons:

  1. Data Nomalization - the structure matches a real person's profile and includes demographic information pertinent to individuals such as age, gender, marital status, interests, etc.
  2. Relationships - modeling of real world private and business relationships such as spouses, siblings, etc. within a single household as well as relationships between persons and organizations.
  3. Consistency - supports a consistent interface for both the ERP and CRM aspects of an integrated suite.
  4. Flexibilitysupports B2B and B2C transactions simultaneously and seamlessly without any messy workarounds.
  5. Visibility - gives the user a much easier paradigm for viewing records; both organizational and individual records appear in a single accounts tab.  With person accounts users have one central place to have complete visibility to ALL records. This is significantly easier than only looking at companies/organizations in the accounts area and only individuals in the contact area.

 

Examples of Person Accounts in ERP

ERP applications implement private accounts to varying degrees.  Following are examples from 2 ERP applications that we support as a firm:

SAP Business One

SAP Business One allows for the categorization of a Business Partner as Company, Private or Employee, but as shown following, this acts as nothing more than an indicator that a company is a sole proprietor.  None of the data schema varies for Company vs Private.  What is most telling is the ability to maintain multiple contacts for the person.

Business One Business Partner Maintenance

Screen Shot 2017-12-08 at 9.57.22 AM.png

 

SAP Business ByDesign

Business ByDesign provides true support for private accounts.  They are treated properly as individuals.  The following screen shows that the account name is maintained using proper first and last family names and that personal contact details are provided.  Furthermore this record is more than a CRM contact as it is flagged as having an Account role, indicating that sales transactions can be booked against it:

Screen Shot 2017-12-08 at 10.07.35 AM.png

Going a level deeper into the relationships tab we can see that standard relation types may be maintained with other person accounts in the system.  Show following are other person accounts maintained in the system who have familial relationships to John Jones.

Screen Shot 2017-12-08 at 10.12.00 AM.png

 

Private Accounts and Relationships in Business ByDesign 

 

Summary

As stated, there are a number of compelling reasons to want to include support for person accounts in an ERP.  Furthermore support for this functionality varies by ERP.  If your company or organization has financial relationships not only with companies, but also with individuals, then consider putting this requirement on your short list.

 

 

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