Difference between ERP and accounting software
There is a common misconception about ERP system and accounting software,to many people, erp is just another name for accounting software and the terms “ERP” (Enterprise Resource Planning) and “Accounting Software” are interchangeable. So many people believe they are the same when technically, they are different.
If you are unaware about the differences between ERP system and accounting system, while making a purchase decision you might be comparing apples with oranges rather than apples with apples. When buying an ERP system for your company It’s quite important to understand how they differ.
In short accounting software has been used to manage accounting of a business, i.e. to manage the inflow and outflow of cash and provide corresponding financial reports. On the other hand, the ERP system is a fully integrated system that incorporates data from a variety of different business processes into a comprehensive, enterprise-wide information system. These includes inventory and supply chain management, customer relationship management, purchase and sales, HR & Payroll and warehouse management. So the accounting software is a small part of an ERP system. Before deciding which will suit better for your current business scenario. Let’s see the major differences between accounting software and ERP:
Difference between ERP Software and Accounting Software
- While an accounting software focus only in movement of cash. ERP system integrates main function in a business like CRM, Purchase , sales, Inventory, warehouse management, HR and Payroll etc.
- When it comes to cost, usually there is a big difference between ERP & Accounting software. Accounting software’s are low in cost compared to ERP and even a small business can easily afford an accounting software. Whereas implementing and maintaining ERP software can be expensive even for small businesses.
- Another major difference with ERP system Dubai and accounting software is the amount of personnel support required to manage and maintain the software. An Accounting software once installed in a system can be managed by the business owner alone. But implementing and maintaining an ERP system requires a team of professionals and domain experts to keep it up and running. Usually the implementation time for a full-fledged ERP would take 2 to 3 months.
- The accounting software will mostly be box product which may not be very flexible, i.e. customisation will not be possible in an accounting software. On the other hand, the ERP system is flexible enough to bring good user experience it can be customised based on the requirements of a business.
- An ERP System integrates different functions of an organisation and helps in planning your resources required for your business, like the amount of raw materials required for production process and managing a project expenses. Also, help in managing highly complex production line. However, an accounting software lacks such kind of functionality.
- The difference between these two software’s lies in the requirements of an organisation. An ERP system UAE can be used by every division or departments of the company and all the employees can have access to use it. But an accounting software is generally only used by the accounting or finance division, and its users are usually the accountants. Before deciding which software should be selected, the company needs to know its requirements first. This is where you need the help of software consulting company like Brainsphere IT solution. Brainsphere is the leading ERP software company in UAE which provides Business management software solutions to different industries in UAE over the past 17 years.
An ERP (Enterprise Resource Planning) system is a concept for planning and managing company resources. This system consists of an integrated programming package and multi modules designed to serve and support various functions in the company so that operational activities become more efficient and the company can provide more services for consumers. It emphasises on planning, resource analysis, purchasing management, sales, accounting, inventory, and even human resource management such as staffing and employee payroll calculations. Therefore, the management team have a bird’s eye view of the entire organisation.
If the company only requires automation for accounting, then using accounting software alone is enough. However, if the company wants to automate every operational activity and connect one division with another, then the ERP system is the right choice.
As a summary we can say an Accounting package handles only individual business functions of accounts whereas Enterprise Resource Planning (ERP) package handles the entire range of business functions of an organisation.