The Key Differences Between ERP Accounting Software

The Key Differences Between ERP Accounting Software

The best ERP software solutions are an amalgamation of ERP accounting software, human resource management, manufacturing and logistics, supply chain management, and customer relationships management (CRM). In this article, we will explore the debate of ERP vs. accounting software and assess the key differences between the two solutions. While there may be some key differences, the ERP accounting software combination also offers many benefits to an organization. 

What is ERP vs Accounting Software?

Enterprise Resource Planning Software (ERP) is an integrated software solution that takes in input from accounting, human resources, manufacturing, marketing, sales, supply chain management, and other departments of a business. ERP solutions offer a unified view of a business’s data to automate business processes and generate insights about the overall picture of the business to help managers make easier decisions. 

Meanwhile, accounting software focuses only on the financial aspects of a company. Accounting software enables businesses to manage their accounts payable, accounts receivable, and other bookkeeping activities to put together financial statements of a business. 

The key differences between ERP accounting software include:

  • ERP software can manage all aspects of a business while accounting software focuses on bookkeeping functions.
  • ERP systems can generate insights into all departments while accounting solutions are limited to financial data.
  • ERP products produce reports that include ERP accounting software functions while accounting software is limited to financial reports.
  • ERP software can be a big undertaking financially for companies, hence, ideal only for larger enterprises while accounting software is relatively inexpensive to deploy. 
  • ERP software deployment requires having a comprehensive overview of the business before implementation while accounting software doesn’t. 
  • ERP software also requires extensive training for users while accounting software is more user-friendly and doesn’t require any extensive training.  

Can ERP Be Used for Accounting?

ERP accounting software is a combined product offered by all ERP providers. ERP accounting software provides insight into the financial data of the business to improve financial productivity via the following methods:

  • Using ERP accounting software, you can estimate the capital requirement and manage cash flow with ease.
  • You can accurately predict and manage budgets with ERP accounting software. 
  • Cost allocation for labor, raw materials, transportation, and other company functions can be handled by a seamlessly integrated ERP accounting software.
  • Payments to vendors and staff salaries can be handled by ERP accounting software. 
  • Data automation for all financial-related activities allows more flexibility for your staff to focus on other activities when using ERP accounting software. 
  • Fewer errors are reported when companies use ERP accounting software.   

Since ERP solutions already provide ERP accounting software, when does a business need to consider upgrading to an accounting system?  

Benefits of ERP Accounting Software

Data Security

With ERP accounting software, you can maintain all company records under one solution and restrict who has access to sensitive data such as financial information. User-based roles in ERP accounting software ensure that only authorized personnel have access to critical company data. Managing user permissions is easier when using ERP accounting software than having multiple solutions to manage company functions and restricting permission in all solutions. 

Integration of All Financial Data

With ERP accounting software, all financial data can be seamlessly integrated with ERP with total accuracy without the error-prone ways of manual entry methods. All financial information from various systems can be integrated into one solution using ERP accounting software. Your organization will have access to precise data by integrating all data in one solution and financial managers will have an easier time performing their roles with centralized data in ERP accounting software. 

Tracking Capabilities

With ERP accounting software, payment and billing tracking capabilities ensure that all payments are made on time. ERP accounting software with CRM capabilities can automate and ensure that reminders are sent out on time. This combination helps organizations maintain a workflow to make revenue and billing management easier.

Report Generation

With access to accurate data in real-time when using ERP accounting software, reports pertaining to any function can be generated with ease. Reports are an essential feature for businesses to make sense of company data and also to provide the framework for financial managers to plan and predict the finances of the company. With accurate reports, businesses are able to make calculated decisions to ensure that their financial health stays intact. 

GAAP Compliance

By using ERP accounting software, your organization can always remain GAAP (Generally Accepted Accounting Principles) compliant. GAAP compliance allows investors to have a better understanding of the financial performance of a business. Due to how ERP works for business process automation functions of ERP accounting software, accurate data is always recorded and ensures that your business remains GAAP compliant without the fear of duplications or errors. 

Is QuickBooks an ERP System?

QuickBooks is not an ERP accounting software solution; it is exclusively an accounting software that doesn’t carry any other ERP functionalities. QuickBooks also doesn’t contain any of the integrated functions of ERP accounting software that help run the other non-financial departments of an organization. 

ERP accounting software can automate every step of the financial process from sale to invoice and combine CRM, logistics, inventory management, and manufacturing components in addition to financial management features. 

QuickBooks is also limited to 40 users which would be very limiting to an organization that has more users. Hence, ERP accounting software is a better solution. 

NetSuite

NetSuite is one of the best ERP accounting software solutions in the market with its cloud-based ERP solutions that is preferred by over 40,000 organizations worldwide. NetSuite offers modern scalable and customizable ERP solutions that streamline all back-office processes. Businesses have the freedom to configure and monitor business operations with the highest security standards with role-based security features.

With in-built business intelligence capabilities, NetSuite ERP accounting software offers real-time data reporting features that empower organizations to always make well-informed decisions with accurate data.  

If ERP accounting software is the right solution for your business, consult with our ERP software page and compare the best ERP software providers to narrow down the best ERP solutions provider for your business.