1 year ago Joseph mathewParticipant
Many people find it difficult to distinguish between ERP and Accounting software due to their shared similarities. Yes, both have some similarities in terms of functionalities however, the goals attained by them are different. Hence, both software is different in nature. This blog will explain the core difference between ERP and Accounting software.
An Enterprise Resource Planning (ERP) solution is a notion for planning and managing organizations or business resources. The system consists of a unified software design package and multi modules developed to support multiple functions within an organization so that the operational process becomes more efficient and the businesses can provide enhanced services to consumers. It majorly emphasizes planning, resource analysis, sales, accounting, inventory, and even HR management.
In general terms, ERPs can run almost all operative actions that exist within an organization. The whole process is run automatically and connected to each other. For example, when the sales department creates a PO, the delivery team can see that there will be an addition to the project deployments to be made. Then, the projects department will be notified with the updated schedule and the business manager can see changes in accruals and added revenue. The entire blueprint from all departments can be seen by business owners or managers.
An efficient ERP can be easily adapted to multiple business and industry models, from manufacturing to wholesale and retail, financial and educational institutions and much more. This solution delivers multiple benefits to businesses, such as streamlining and accelerating job requirements, dropping human error, delivering vital data to the business in real-time, helping owners or management in decision making, tackling customer experience issues, improving operational productivity, and many more.
In other terms, Accounting software is a program built precisely to simplify the accountant, bookkeeper or auditors work in taping all the manually done transactions, such as sales, payroll, purchases, and many other activities to produce financial reports as contemplation in the decision-making process.
Basically, this software is developed with the aim to support an accountant in making simplified financial reports consisting of the balance sheet, accruals, P&L, cash flow, tax files, etc. This further provides many other value-adds to the organization, such as fast-tracking the work of financial reports, avoiding inaccuracy, improving efficacy, automating transactions, supporting business in the decision-making process by presenting real-time real data, and figuring the financial condition of the business.
Differences Between ERP and Accounting Software
The difference between these two software lies in the organization’s needs. ERP system can be used by multiple departments of the company and the complete workforce can have access to use it. Whereas, accounting software is largely used only by the accounts or finance department, with specified access.
Before deciding which solution should be purchased, the organization needs to know its needs first. If you only require automation for accounting, then using accounting software alone is enough. However, if the need is to automate every operational activity and connect all departments, then ERP software is the right solution.
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