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How To Differentiate Erp With Accounting Software

By Author: Murtaza Habib
Total Articles: 7

The difference between ERP and accounting software relies on their

- functionality
- Outputs
- Size
- Design style
There's always a confusion for people at the time of buying whether to go for accounting software or ERP.

= Accounting software has been and will always remain one of the most important parts of every enterprise resource planning software as businesses run on the basis of accurate accounting.

= But ERP is much more than only accounting. As the organization keeps growing other aspects of accounting rises. New aspects of accounting keep increasing like SCM, Marketing, Human Resources, SFA, Logistics etc.

= To reflect the status of entire organization whether small or big

Enterprise resource planning software takes care of this possibility including accounting to allow the information to flow from one department to another in real time and produce consolidated outputs

= ERP software is resource management software which handles all the activities of an organization, example manufacturing business - this ERP keeps track of raw materials, suppliers, sales records of finished products, the labor involved.

= Whereas accounting software keeps track of finance flow by processing debits and credit notes, receivable and payable and generate reports through which the organization can understand their profit and loss.

= The confusion about the differentiation between both ERP and accounting software has grown largely due to the fact that most of ERP software companies have taken over small accounting software companies to develop Enterprise resource planning software.

= To identify the difference you should be aware of accounting software starting from sale, purchase, cash flow, bank vouchers to balance sheet, reporting explaining the financial status of the organization within the given period.

= ERP handles much beyond than simple accounting and can predict Future losses or profits

- Market trends
- opportunities
- profit margin
- cost of production
- quality of finished products
- identifying new markets etc., all this can be submitted to the management in one consolidated format.
= ERP is a tool which not only simply explains how business is running but it can also provide suggestion how to run it better for earning higher profits and look for better opportunity.
= With Financial Power ERP:

- work at multiple distant conveniently
- geographical locations
- can get a consolidated status of entire organization at the main office every day.

= Quality accounting software can handle

- multiple accounting systems
- complex transactions

= But ERP can provide
- much deeper analysis of each location's day to day working
- strict policies terms at every step without manual monitoring.
- changes can be implemented in the working at the main office and those get implemented at one go at every location.

Thus Enterprise resource planning (ERP )software has the much higher response than accounting software by providing far better control to the management and also keeps updating and consolidating information at every step to make correct decisions.

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