ERP vs Accounting: Who Will Triumph?

Accounting and enterprise resource planning (ERP) software both provide businesses with support in managing financial processes.

Accounting software focuses on core accounting functions such as budgeting, invoicing, payroll, and general ledger, while ERP software provides a more comprehensive solution, by connecting other business processes such as inventory, order management, and production. Depending on the size and complexity of your business, you may require one or both software solutions. Before making a decision, it’s important to evaluate the features and benefits of each system to determine the right fit for your business.

business performance graph on paper on desk

ERP software is considered to be a type of enterprise application, that is software designed to be used by larger businesses and often requires dedicated teams to customize and analyze the data and handle upgrades and deployment. In contrast, small business ERP applications are lightweight business management software solutions, often customized for a specific business industry or vertical.

Today most organizations implement ERP systems to replace legacy software or to incorporate ERP applications because no system currently exists. In fact, a 2016 study by Panorama Consulting Solutions, LLC., indicates that organizations implement ERP for these top reasons:

  • Out-of-date ERP software (49%)
  • Homegrown systems (16%)
  • Accounting software (15%)
  • Other non-ERP systems / had no system (20%)

Why are ERP systems modular?

ERP software is typically comprised of different modules so that business owners can adopt the specific tools that are applicable to them. ERP software is available with project management or CRM modules, for example, to help connect critical data points. Adopting ERP software with the relevant modules allows an entire company to work with the same comprehensive suite of tools, using the same database.

Modular ERP System

This level of consistent information helps key stakeholders within the company to communicate in a timely and meaningful manner through analysis. Furthermore, instead of guesstimating, leaders can estimate and adopt effective solutions to solve supply chain issues, etc.

Being a modular system also means that users can upgrade as they grow instead of spending big on a system with features that they can’t use. Think of it like this, you buy a computer, but as your needs grow it requires an upgrade, you start by replacing the CPU with the GPU, and so on. An ERP solution is similar as well.


Looking to upgrade your Accounting Software to an ERP solution?

Here are some key indicators that you need to upgrade to an ERP solution

Accounting,ERP,Accounting and ERP,accounting and finance erp,accounting and finance erp components
  1. Multiple trading entities
  2. Incomprehensible data
  3. Micromanaging Inventory in Multiple Locations
  4. Waning Supply Chain Management

To find out more, our article here goes further in-depth on identifying these critical indicators for your growing business.

Moreover, ERP software enables companies to:

Control their finances: With capabilities far beyond simple accounting software, ERP manages finances and cash flow, revenue and expenses, and cost accounting.

Digitize their reporting: Integrated management means that companies can gain insight and report on all processes, activities, and workflows. ERP software reduces paper-based transactions and reports and provides integrated monitoring of business performance and objectives.

Lower their IT costs: By using a single, streamlined solution, the IT burden of managing or integrating multiple systems is eased. Upgrades are simpler, deployment is easier, and scaling isn’t a problem.


So…

Accounting software focuses on core accounting functions such as budgeting, invoicing, payroll, and general ledger, while ERP software provides a more comprehensive solution, by connecting other business processes such as inventory, order management, and production. Depending on the size and complexity of your business, you may require one or both software solutions.

Before making a decision, it’s important to evaluate the features and benefits of each system to determine the right fit for your business. Let us help you on your digital transformation journey.

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