A common misconception is that the best ERP systems and accounting software are interchangeable terms or represent the exact same technology. However, that is not correct. While both share some commonalities, ERP accounting software is capable of far more than accounting software, which is strictly limited to a business's financial and accounting aspects.
This article will discuss the differences between the two, the features and benefits of ERP accounting software, and whether QuickBooks and SAP are ERP systems or accounting software.
Is ERP the Same as Accounting Software?
ERP accounting software is not the same as Accounting Software. The core differences lie in the scope of the two software, the enterprise operations for which they share information, and their capabilities as industry-specific solutions such as managing inventory accounting software. There are also more specialized systems like real estate accounting software or lease accounting software that are more industry-specific.
Scope of the Software
Compared to accounting software that only covers the financial aspects of a business, ERP accounting software encompasses a wide range of functions. An ERP accounting software manages information on the cash flows along and rapidly responds to real-time market trends for a fully centralized system that handles processes across every department.
While accounting management software is a dedicated financial management solution restricted to financial reporting, ERP accounting software gives a comprehensive view of all business operations.
Capabilities as Industry-Specific Solutions
The capabilities of accounting software are limited to meeting industry-specific requirements. In contrast, an ERP accounting software such as SAP has industry-specific solutions tailored to the discrete market needs of particular industries. Therefore, while accounting software rarely adapts to one sector, ERP accounting software, on the other hand, can be deployed and modified to meet unique requirements.
Best ERP Accounting Software Features and Benefits
ERP accounting software plays a critical role in enhancing operational visibility and improving collaboration among the workforce. Some of the best features and benefits of ERP accounting software are:
Centralized Data Repository
Effective ERP accounting software prevents data silos and cross-purpose functioning of departments leading to inefficiencies. An ERP provides a single, centralized view of essential business data that is sharable organization-wide and close to real-time. This data can be utilized to gain valuable insights into reallocating capital and other resources. The advantages of cloud based accounting software are growing, causing more companies to invest in systems with more flexibility and mobility for centralized process management.
Automation of Redundant Tasks
Automating redundant business tasks to minimize errors amount of time spent on manual work involved in accounts receivable and accounts payable processes and enabling employees to focus on value-adding tasks is a prime benefit of ERP accounting software. Manual tasks that can be automated with an ERP include reporting, invoicing, payroll, and order processing.
Business leaders prioritize using data effectively and generating valuable insights with it. ERP accounting software enables users to do just that, streamline operations, identify non-compliances, reduce costs, and serve customers optimally. Cloud computing accounting software offers more flexible reporting and data analysis tools but they're less customizable than an ERP.
Aside from practical data usage, ERP accounting software enables the compilation of extracted information into reports with visual representations, making it easier for readers to identify patterns and trends.
Visibility of Business Metrics
Another powerful feature of ERP accounting software is its capability to allow organizations to monitor and understand business metrics by enabling easy and companywide access to near-real-time data.
Optimized Sales and Marketing
ERP accounting software improves customer experience by benefiting both marketing and sales teams. ERP accounting software allows easy selling, upselling, forecasting, tracking profit margins, and generating quotes and purchase orders. Furthermore, ERP enables the marketing teams to develop and execute campaigns more efficiently, drive more leads, and track customer activity.
Financial management requires extensive planning, organizing, and tracking of economic data from all departments. ERP accounting software can make it simpler by assisting finance teams and accounting practice management with the management process by monitoring, analyzing, and reporting essential business data.
Customer Relationship Management (CRM)
ERP accounting software with integrated CRM features enhances the view of the business by sharing customer relationship data, including contact details, order history, and prospect status, in an easily accessible database.
Human Resources (HR)
ERP accounting software has a Human Resources (HR) component acting as an employee management platform, handling hiring, onboarding, payroll, hiring, onboarding, timekeeping, and other HR functions. It further automates complex HR functions such as taxation, saving time and reducing the chance of errors.
Supply Chain Management (SCM)
A company’s supply chain management (SCM) system efficiency is tracked by an ERP accounting software providing real-time data insights on a company’s supply chain. This facilitates the identification of inefficiencies and enables greater control over inventory.
Is QuickBooks an ERP System?
QuickBooks is primarily an accounting software only and not an ERP accounting software. Therefore, despite its popularity, choosing QuickBooks without any other ERP functionality will have your business lacking in many advanced techniques.
While QuickBooks is an excellent choice for accounting and finance-oriented processes, unlike ERP accounting software, it is of little to no use in other business domains. Compared to ERP accounting software, QuickBooks allows users to manage negative inventory, restricting them to just a handful of functionalities.
Is SAP ERP an Accounting Software?
SAP is a financial accounting and reporting software that has revolutionized the digitization of the accounting system. It sends out reports on a monthly or quarterly basis as well as analyzes finances. Since manual tracking of an organization’s finances is complex, time-consuming, and prone to error, more and more businesses now choose SAP accounting software to refocus the time and effort of resources on more value-adding tasks.
SAP is easy to learn, so once the staff is trained and the software is implemented, work can be more flexible, efficient, and responsive, as intended.
What is the Best ERP Accounting Software?
An ERP accounting software enables accurate company management to allow proper company analysis and enhance profits. Choosing the best ERP system is essential to allow maximum productivity and enhanced data visibility for your business. Transparent requirements are the crucial first step in selecting the best ERP accounting software.
The best choice for you depends on your industry; for instance, for the retail sector, you will require an ERP accounting software that can provide clarity regarding your transactions, online orders, home delivery, and more in real time.