ERP (enterprise resource planning) software aims to ensure that a business is organized in such a way as to run at optimum efficiency and effectiveness.  ERP software deals with the functions of a specific business, regardless the size of the company, how it is organized, or what good or services it produces.  Initially designed to help manufacturing firms, technology has advanced to the point where ERP software packages today are designed and customized with add-on features and modules to fit almost any business need. So many varied ERP software packages exist that, in fact, non-manufacturers, non-profit organizations, medical offices, and even government agencies are able to use ERP management systems.  

ERP Software

One of the important functions able to stand alone as its own software solution, or to be included in an ERP software package is Accounting.

Traditionally, ERP software managed resources, materials, supply chain, orders, distribution, and other tangible processes. It included a wide range of functionality. Additionally, ERP software often included intangible areas such as marketing and customer relations.

ERP Software Accounting

The parameters of Accounting Software, however, were much narrower. This type of software traditionally dealt only with accounting transactions like accounts receivable, accounts payable, balances, and payroll. The more commonly used modules were General Ledger, Expenses, Sales Order, Purchase Order, Billing, and Time sheet.

Proponents of keeping accounting software and ERP software separate state that ERP systems are already intricate enough. The scope of ERP spans all the businesses operations and becomes involved in many areas of the company. Therefore, trying to implement a dynamic ERP system that includes accounting is an even more lengthy and complex process.  On the other hand, these advocates believe that accounting systems are straightforward. They typically require little customization, if any.

True or not, the consensus is that businesses need to integrate accounting into every department present and therefore need a robust accounting software with the capability to interact with all departments. As the industry moves forward, separate accounting software use is fading away.

Experts identify the primary difference between ERP and accounting software as the difference between handling individual accounts and the accounts of the entire business. ERP software caters to all the possible functions of the business. Accounting software does not provide this type of functionality. It focuses more on the statistics and numbers of the resources, budgets, and reports. ERP software solutions also have the capacity to analyze trends and recognize problems, which help make the most of materials, manpower, machinery, etc. Consequently, a business that plans to grow, should investigate ERP Software that contains Accounting. This will help secure that growth takes place correctly.

Written by :

tracey boxer