Although accounting software and ERP software are often lumped together, they are actually quite different. Accounting software covers the basics in terms of financial reporting, sales and what your company is owed. ERP software, on the other hand, includes a variety of integrated management processes with only one of them being accounting.
As a business owner, it is important to understand the differences between accounting and ERP software so you can decide which best meets your company’s needs.
What is Accounting Software?
Accounting software helps businesses record and report their financial transactions. Not all accounting software is created equal, as each is unique and comes with its own features and benefits. Smaller companies do not need the same functionality in their accounting software as large companies do. Larger companies might need customized software tailored to their business, while smaller companies can get away with a more generic option.
Accounting software makes accounting calculations easier to perform, understand and analyze. Easily access both, old financial data and up to date real time data, and use it to your advantage with accounting software.
What is ERP Software?
ERP stands for enterprise resource planning. When you use an ERP system, you will see that, along with supply chain management, CRM, and many other business resource management forms, it also contains accounting software. This allows you to have full control over your business processes and increase visibility within your enterprise.
When you use an ERP solution, you are using one system that provides you all of the information across your business. By using analyzed data, you can streamline sales and inventory and easily boost your overall productivity.
Accounting Software vs ERP Software
One vs Multiple Business Units
While ERP software can streamline and increase transparency across multiple business units, accounting software is focused on one. ERP software includes financial management, customer management, purchase requirements, sales handling, and more. On the other hand, accounting software simply provides you with the tools to manage your business finances.
Your customers are the lifeblood of your organization. Even if you sell and distribute wholesale, your customer satisfaction is just as important as if your were B2C. ERP includes a Customer Relationship Management (CRM) module that helps you keep track of activities, nuances and special requirements of your customers which can be visible to every one of your employee. Accounting software does not.
Customized For Your Industry
Accounting software is built for the general needs of all consumers. While this can be good if you are looking for a simple software that provides financial management, ERP provides a much more customizable experience. ERP is not limited to tracking inventory and sales. Instead, you can use fully customizable software that is based on your industry.
One Single Database
Although accounting software does offer real-time data, it is not integrated with your other tools as is ERP. ERP provides one place for all of your solutions to be together. This allows you to stay organized and access any data, anytime, anywhere from one single database.
Which is Best for your Business?
If you are running a small business with less than five customers, you may be able to perform your own accounting even without the help of accounting software. If you are a medium to large company with 50+ employees, it can be beneficial to have your inventory, financials, and supply chain all in one location.
Whether it is for sourcing materials or sourcing labor, many manufacturing and distribution businesses work with employees in different parts of the world. Regardless of your business’s size or where your employees are located, anyone in your organization will have access to the information that they need. By unifying your systems, you will help your staff use their time more efficiently and become more productive all around.
Speak with an Expert Today
Deciding between software is a big decision for your company. Accounting software is not something that you want to change annually. You want to choose a software that will scale with your business over the next few years. i-Tech is a certified partner of Acumatica ERP software.
Acumatica builds ERP solutions tailored to the manufacturing and distribution industry. Consider Acumatica Manufacturing Edition or Distribution Edition. To learn more about how Acumatica cloud ERP software can transform your business, contact us today!