Difference between Accounting Software and ERP
ERP stands for Enterprise Resource Planning, for most of us, the terms Accounting Software and ERP are same. This confusion is very difficult for companies specially when procurement decisions are based on the simple comparison of apples to oranges, i.e. two completely different sort of products.
So what exactly is the difference between accounting software and ERP? Simple put, accounting software is just a small part of the big ERP software function and represents a very small fraction of the advance features offered by a full fledged ERP. This truth, however, is just the tip of the iceberg.
What does Accounting software covers?
Predictably, accounting software deals with only the financial aspect of the main operations by recording business transaction flow like Account receivable / Account Payable, Journal Entries/JVs, and general ledger utilized to produce basic financial reports like profit and loss, cash flow statement and balance sheets. Due to this specified but limited scope, the accounting software market has experienced some instability with accounting software companies resorting to buyouts or ceasing operations altogether. Why?
Accounting software provides a good snapshot of a organisation’s overall financial position for today, but it does not anticipate’s future forecast and does not includes any planning functionality. Without data-driven forecasting, organisation base business decisions primarily on SWAG (Scientific Wild Assumption Guessing) to predict supply and demand for products and services causing many to fall short of their profitability goals.
Why ERP software?
Accounting functionality comprises just one part of the overall solution. While on the hand ERP’s main focus is to facilitate the day-to-day management of business operations by incorporating data from multiple aspects of the business into a seamless and comprehensive information system. ERP encompasses advance features like , Queries, Leads, Sales Quotations, Sales Order Entry, Sales Deliveries, Financials, Customer Relationship Management/CRM, Reporting, Procurement, Purchase Orders, Stock Requisitions, Import Costing, Voucher approval and authentications, Stock Control, Secondary Processing, Warehouse Management (automation/scanning), Serial/Lot/Batch Control, Quality Control Tracking, Bar-code Label Generation, Sales Kitting/Assembly, and more along with other functionalities of EDI, E-commerce, Mobile Apps and API integrations.
By carefully processing and analyzing information through these organisation-wide functions, an ERP software delivers forecasting integral to improving the timing of sales and inventory, detecting process loopholes and deficiencies, and identifying strategic enhancements competitive advantage and growing productivity for the business.
What is Best Software for You?
Because everyone demand a more complete and long term software solution, ERP continues to consume the accounting software market. Understanding the differences in software functionality is critical to your organisation’s near and long-term success. If you’re currently exploring software options for your company, Hisaab ERP can help you. Our experienced team will listen to your requirements, answer your queries, and demonstrate the benefits of our comprehensive ERP software functionalities. You can also Check out the demo by clicking the blue button on the top right section of this page, or contact us here.