What is the Difference between a System that Exploits Critical Time and Resources and ERP?
A great number of small-scale enterprises think that it is high time to upgrade their IT systems, including hardware, especially software, based on the effect of the growth or the importance of resource efficiency. However, they are not sure whether they are ready to implement complete ERP software or independent accounting software by importing official accounting. Here, we will touch upon the differences that can help you to find what you need.
What is the Difference?
As it can be concluded from its name, an accounting program only deals with accounting business functions. On the other hand, Enterprise Resource Planning (ERP) software deals with a range of business functions, including accounting, finance, inventory and supply chain, and all units including production.
Accounting software vs. ERP software: Which one should you choose?
When you are making the decision whether to use ERP software or accounting software for your business, you should ask yourself the following questions:
How many different systems do you need to manage?
If you buy an accounting program, will you manage your prospective customers, customers, business partners and suppliers, stocks, purchases and product trees with different software?
Think about how many separate point solutions you will need to manage and maintain them. One of the biggest drawbacks of having more than one system in your business is that IT management may turn into a nightmare. Customizing and integrating these system as well as maintaining patches and upgrades can be a complex and costly process and turn into a system that exploits critical time and resources.
Although it is possible to integrate some of these different solutions to supplement each other, you will continue to manage several systems simultaneously. In addition, when various systems run independently, this may deteriorate processes used to ensure a smooth operation of your company.
If you believe that you will manage various point solutions as well as your accounting software, you may think about investing in an ERP system.
"The only system you need to worry about: ERP"
ERP software integrates all of the business functions of these systems based on a single database. This means that you have only a single system that you need to worry about. In addition, your employees can access to data from a single source of information, which decreases all efforts.
Is growth a target in your business?
In our visits, some directors have shared that they do not target growth but to progress in a controlled manner with available resources. Unlike these enterprises, there are also some enterprises that target business growth.
If you are planning to grow, it makes sense to think about ERP software. Apart from investing in independent accounting software, it will be a good idea to gather them all under single software and not to ponder over a different software system 3 years later, instead of making efforts to use different software for different processes.
"You may exceed the system capacity."
Although numerous accounting packages are great for small-sized businesses, they may start to compete with medium-sized, high-volume companies and larger enterprises. Now, if you choose an accounting package and grow in time, please remember that you may exceed the capacity of your system and you may need to switch to an ERP solution with richer features in the future.
Most ERP software systems are scalable and usually modular in design so that as your company grows and your requirements change, you may continue to develop it on your system.
Does the staff, apart from your accounting team, need visibility of specific financial data?
Whenever any department in a company has a separate system designed to complement its business processes (for example, Excel or an accounting package so designed), they may only display business data in this system. Therefore, in such a configuration, generally only the people in your accounting department should be able to view the financial data.
However, it may be useful for members of other departments to be able to view the specific data contained in the accounting software. They do not need full access, but it will be helpful to allow them to display certain information. For example, a member of the sales team may need to know how much a customer is paying for the last order and at the present, they have to go and ask the accounting department to get this information.
"It is possible to allow access to the required data.”
Using ERP software, all information is available on the same system. Thus, every employee can display what they need to see without disturbing other teams. This does not mean that everyone can access to everything. Of course, you may define restrictions on each employee so that they only have access to the information they need to fulfil their role.
Do you need to be able to report KPIs across your business?
Despite the accounting software you chose, which probably offers good reporting and analysis tools, the problem is that it will not bring together the data from your entire organization. Your reports will only contain financial data and will not combine data from other parts of the business, such as sales or stock levels. For example, you may only need to create a sales order and invoice report, which you can retrieve by integrating your financial information with different software.
"ERP software provides powerful reporting tools and search capabilities."
ERP software offers powerful reporting tools and search capabilities because it contains all vital business data from the entire business world. This means that you can find any data you need from any department quickly and easily, provided that you have the necessary access rights. Then you may draw up accurate reports about important aspects of your business.