What’s the Difference Between ERP and Accounting Software?
December 27, 2019
Although Enterprise Resource Planning involves operations and finance, an ERP system is not the same as an accounting software package. ERP does far more than simply track finances while offering greater flexibility than accounting software with fewer limitations. Let’s break down the difference between the two in more detail.
What Is Accounting Software?
Accounting software handles transactions like accounts receivable and payable, trial balances, general ledger, financial statements, cash management and bank reconciliation, and sometimes payroll and fixed asset management. More robust accounting systems also handle basic inventory, sales order management, and purchase order and receiving. But it doesn’t provide any real-time tracking of inventory, manufacturing management, materials and production planning, cost accounting, workflow management, human resources or customer relationship management. Accounting software enters the business process journey with a sales or purchase invoice while ERP can follow leads before conversion through a built-in CRM system.
What Is ERP?
While there is some overlap between accounting software and ERP systems, they have significant differences. ERP is a resource management system, tracking tangible and intangible assets, materials, human resources, and financial resources. Think of your business process as a jigsaw puzzle. Accounting software is only a single piece that must be joined with others to form a complete picture. Tools for managing logistical requirements, inventory, supply chain, warehouse management, contact management, and planning tools are the missing pieces that must be purchased separately and may not fit with each other. ERP, on the other hand, includes all of the puzzle pieces, and these pieces are designed to fit together creating a clean and streamlined system of integrated business processes.Small to medium-sized businesses often start with basic accounting software like Quickbooks. This solution is adequate when these companies are very small and order volume is manageable. As the business grows, the limitations of stand-alone accounting software packages become more apparent. ERP is a fully integrated, comprehensive, beginning to end solution that connects nearly all process areas of your business...in one common database, where there is only one “version of the truth”. If you have questions about ERP and how the Attivo Group can help effectively implement the system into your business, give us a call today and schedule a complimentary analysis at 877-428-8486 or contact us online.