Blogs
ERP and Accounting Software for Business: Differences Explained
The terms ERP systems and accounting software are typically used interchangeably as both platforms share similar features to manage business financial operations. However, they are not the same. Accounting software and ERP systems have some key differences that set them apart.
Let’s dive into them and find out which accounting software for business is better suited for your organization.
Key Differences Between Accounting and ERP Software
These are the main differences between ERP software and accounting software for business:
-
Scope
The main difference between online ERP software like XLedger and accounting software like Quickbooks is that accounting software focuses specifically on managing the financial operations of a business. Functions like the general ledger, accounts receivable and payable, payroll, and financial reporting.
On the other hand, ERP systems offer a holistic and all-encompassing solution. Aside from financial tasks, they’re also designed to manage and streamline all the major functions of an organization like inventory, HR, and Customer Relationship Management (CRM).
Learn how your organization can benefit from switching to Xledger from Quickbooks here.
-
Implementation
Due to the robustness and wide range of capabilities of ERP systems, implementations tend to be more complex than those of accounting software.
An accounting software implementation would typically be quicker and less disruptive as it only involves a handful of departments like finance, IT, and compliance.
However, ERP systems are used across the entire organization and affect the operations of more departments from HR, to operations, sales, customer services inventory, and of course finance.
This makes deploying online ERP software a large-scale endeavor that requires interdepartmental collaboration and the right ERP partner.
-
Industry Focus
Because accounting software is designed as a quick out-of-the-box solution, it often lacks the flexible customization capabilities that allow it to adapt to industry-specific scenarios. Therefore, accounting software might be more suitable for very small businesses or startups without complex operations.
On the other hand, ERP systems are the best accounting software for large businesses.
If you’re looking to automate large operations in a way that makes it easy to scale, or that is specific to the needs of your industry, then an ERP system might be the better option for you.
At XLedger we empower every customer with personalized software service for every stage of their finance process. Book a FREE demo with us here
-
Value
Since ERP solutions are more robust than accounting software they tend to have more elevated price tags. However, this does not mean that you will end up paying more for adopting an ERP solution.
On the contrary, an all-encompassing solution like an ERP system could ultimately cost your business less than maintaining multiple subscriptions.
For example, your business can save by consolidating multiple licenses into a single payment, or by reducing costs associated with integrating and troubleshooting the interconnectivity of multiple systems.
When Should I Choose an ERP System Over Accounting Software?
Systems are at the core of any successful business expansion, which is why having reliable tools to support your operations growth is critical if you want to scale. The same finance software your company used during its start-up stages might no longer meet the needs of an expanding operation.
If your enterprise is facing any of these challenges, it might be time to switch from basic accounting software to a robust ERP system:
- Challenges in integrating data across departments
- Issues dealing with multiple tools and APIs
- Not having real-time reporting capabilities
- Problems with forecasting your business finances
- Need an integrated solution to manage your inventory
- Want to automate processes and free your finance department from repetitive tasks
- Struggles scaling your operation
- Challenges in meeting regulatory compliance
- Limited options for customizing workflows
- Need to integrate CRM with finance operations
Online ERP software can help you automate processes, streamline operations, and connect all aspects of your business in one place.
If you’re ready to scale out of your simple or outdated accounting software, book a free one-on-one demo with our team of experts. From there, our team will guide you every step of the way.
Free your finance team from tedious and repetitive accounting tasks and contact us today.
Curious About What Else ERP Software Can Do For Your Business?
Check out these value-packed resources:
