Since the financial software market explosion over the last decade, the line between the two most popular system types has become blurry. As a result, many people in the industry, myself included sometimes misuse the terms. Though they may seem interchangeable, they’re different products, each with their own purpose. So, today I want to shed some light on the ERP vs accounting software debate for anyone who wonders what the difference is, or which they should look for.
ERP vs accounting software, what’s the difference?
ERP and accounting software are both tools to help you manage your business’ finances. On one end of the spectrum, you have accounting software and on the other end ERP. Accounting software, as the name suggests focuses solely on your finances. So, it can handle things like, banking, accounts receivable, accounts payable, financial reporting and basic revenue reporting and tracking.
ERP does all of this and more. On top of helping you manage your finances, ERP can also give you better control over inventory, supply chain, warehouse, customer service, e-commerce and more.
ERP vs accounting software, which do I need?
Great question! Here are some telltale signs:
- You used to love that your accounting package is simple to use. But now, that simplicity feels too limiting.
- You’ve already reached or are approaching the maximum record limit. With most entry-level accounting packages there is a finite limit to how many records they can process and keep in their archives. When you near it, the software’s performance often suffers. And, it will eventually force you to erase records.
- You don’t have the audit trails or other advanced financial capabilities your growing business needs. While these may not be a requirement for very young businesses, if you want to go public or build stronger relationships with lenders to fuel your growth, they will be.
- Limited reporting makes it difficult to understand your current financial state. Most accounting packages offer some out-of-the-box reports. But because they only look at one small portion of your business, their reports cannot give you a complete view of your business’ overall health. Since ERPs connect multiple departments, they’re able to give you far more in-depth reporting.
Want to learn more about making the switch from an accounting package to an ERP? Not sure if it’s the right time? Visit this webpage. Although we originally wrote it for QuickBooks users, the advice it gives applies equally well to users of any other similar accounting package.
Questions? Need help from an expert to find the right solution for your business? Contact us. We have nearly 30 years’ experience helping businesses of all shapes and sizes find the technology they need to reach their goals.