Accounting Software vs ERP
There is a wide variety of accounting software in the market making it to differentiate between software that supports solely accounting functions and Enterprise Resource Planning (ERP). The confusion becomes profound when business owners realise that there are third-party applications that can perform accounting functions that are not necessarily ERP solutions.
Below are four key difference between accounting software vs ERP
ERP is comprehensive business management solution
ERP is an all-encompassing solution to manage your business. The functionality of ERP enables you to manage both tangible and intangible assets including financial resources, inventory, materials, human resources, and more. The software also covers customer relations, timesheets, product lifecycles, manufacturing, and more. Conversely, accounting software will only cover basic financial and cost accounting activities including accounts payable, accounts receivables, sales tracking, cash flow, ledger, and balance sheet.
Accounting is a subset of ERP
Accounting is a subset of the entire ERP solution. Accounting covers basic financial functions including accounts payable, accounts receivables, payroll, cash flow, and more. ERP solution covers a lot more functions that spread across sales, marketing, finance, warehouse, and operations department. In essence, ERP is a more complete solution to manage your entire business.
Managing the lifecycle of a customer
Businesses using accounting software are only able to track the financial element of a customer, and will not have the ability to manage the entire lifecycle unlike in an ERP. ERP solutions enable you to manage leads with the in-built CRM features, track emails and/or communications, track historical purchases, predict deliver timeframes, make forecasts of future purchases, and more. The ability to analyze every step of the customer’s lifecycle enables a business to make better business decisions, improve product/service offerings, and eventually improve the bottom line of the business.
Manufacturing and inventory management
For businesses that have manufacturing facilities, ERP offers the ability to track stock levels, resources (manpower, machinery, etc), delivery time frames, customer orders, purchase requisitions, and more. Accounting software does not have the ability to manage manufacturing or inventory. For businesses that need to manage complex inventory scenarios, an ERP solution would be necessary to keep an optimal inventory solution.
If you would like to know more about the difference between basic accounting software versus Enterprise Resource Planning (ERP) software, download the ERP Buyer’s Guide or contact us for personalised consultation.
SAP Business One is an affordable Enterprise Resource Planning (ERP) software designed for small to midsize businesses. As a business management solution, SAP B1 streamlines business processes, provides real-time information, and help boost overall business performance. The solution covers finance, sales, customer relationship, purchasing, procurement, inventory and manufacturing in one centralised system, enabling accurate and precise information retrieval that assist in reporting, forecasting and analysis.