Accounting Software Vs. ERP: Which Do You Really Need?

As much as we probably hate to admit it, money makes the world go round. Because of this, each business’s accounting team is essential. Once called book keepers, we now live in a fast-paced, digital economy; your accounting team should have access to high-tech tools and software in order to ensure the company’s financial health.

When I was a child, my mother worked for a large-scale corporation as part of their accounting team. I remember her staring at her computer screen, printing out spreadsheets after hours of data input, and, of course, the clicking of the keys from the enormous calculator with the roll of paper on the back to print out your totals. She never complained about her job, but to me, it seemed really tedious. Thirty years later, software can automate a number of the daily accounting tasks. There’s less risk of human error, and your team now has more efficient, real-time data to analyze and consider.  Much of this can be accomplished thanks to accounting software within a cloud-based ERP solution.

So what’s the difference between an ERP system and accounting software?

A simple answer is that an ERP system is all encompassing, whereas accounting software is more specific in function and nature. AIS, or the Accounting Information System, is responsible for recording business transactions through things like accounts receivables, accounts payable, and general ledgers, which is used to create important financial documents such as income statements and balance sheets. This information is shortsighted, though, because of its lack of integration compared to ERP.

This is to say that while accounting software can give you a financial look at the company at a glance, it cannot help you predict for tomorrow. ERP systems, however, can make predictions thanks to their data-driven forecasting.

It’s important to remember that there are benefits to accounting software as it handles various financial needs. In addition to those mentioned above, accounting software allows for revenue tracking and financial reporting, payroll and timesheets, purchase orders and expenses, and electronic payments. It does all of this while still eliminating manual data input, simplifying payroll and tax filing requirements, improving data accuracy and access, and reducing staff costs.

The bottom line is that accounting software offers a great deal to your business by streamlining and automating processes.

There is some crossover when it comes to the two tools, but an ERP solution is a resource management system that factors in various aspects of business, both tangible and intangible. It can link multiple departments and find answers in real-time for the bigger picture.

The ERP tool can provide accounting functionality while offering much more in-depth reporting and control. This is because the ERP provides financial data as well as supply chain information, orders, material planning, manufacturing and warehouse management, among other things like time & attendance, product lifecycles, and customer relations.  An integrated ERP is able to show you not just where you are, but where you could be.

Most businesses function at a higher level when they operate with a complete software solution; therefore, ERP tends to overtake the accounting software market. Acknowledging the differences in the two tools is critical in finding what will help your company find success. What is it that you really need? Is it something to help manage your business or just a tool to keep track of your finances?

If you think that ERP software would benefit your business, there are plenty of ERP solutions to choose from. It’s important to do the research to find out which system will be right for your business.

Is it customizable?

Can it easily integrate with other applications?

Will it support the company both today and in the future?

How and when will it be deployed?

Are there hybrid options?

Consider all of your needs before looking in to all of your options. Finding and implementing an ERP is a time-consuming task, but it is worth it in every way. The ERP consultants at Godlan are happy to help you evaluate your options and help take your business to the next level. To learn more about Godlan and Infor Syteline ERP, visit Godlan.com today, or give us a call at 586.464.4400.