People usually get confused how accounting software is different from an Enterprise Resource Planning (ERP). If you are the one who is in the same quandary, you are at the right place. Have a glimpse to this article to know about the differences between accounting software and ERP.
ERP is application software which can integrate all the functional areas in the organization. The functional areas are production, logistics, accounting, sales and human resources. It actually comes as a package. If you purchase Enterprise Resource Planning package, it will come with all the above mentioned modules. Accounting software is one among those modules integrated in the ERP.
Accounting software is something which handles only the financial part of the company. It integrates Ledger, Accounts Payables and Accounts Receivables for that matter. It will not have the capability to look after the end to end operations of the company.
The name ERP itself speaks a lot. Enterprise Resource Planning - Plans the resources according to the requirements. There are a lot of benefits you get from the ERP package. The work gets delayed because of the poor communication between the inter departments in the company. With the help of Enterprise Resource Planning, you can easily track the production life cycle of any product. You can track whether the product is still in the production process or it is there at the inventory.
Order tracking is one more important concern for the manufacturing companies. A production manager in the production environment with out an ERP application may not immediately get the update on the order situation. Having an ERP implemented, you can track the order situation on day by day. This is what makes the business owner or the production manager to commit the customer on the delivery dates. It automatically does the scheduling process.
The allocation of human resources to the required machineries will be done accordingly. This will help the production department to reduce the lead time. As it will integrate all departments in the company, everybody can see what is happening in the production and everything will be displayed on the system with a single mouse click whereas the accounting software role is restricted to its own department.
Accounting Software only takes care of the transactions take place in the accounting functional department. It may be general ledger, account payable, accounts receivable and some times payroll but can not help people to know what is happening in the production environment. Normally, accounting software is designed to look after some specific needs of the specific industries. Banking, medical transcription and retail are some of the verticals where in the role of the accounting software is so huge.
Of course, every package has got its own advantages in a different point of view. Evaluate thoroughly before going to decide on what requires for the company. It mainly depends on the industry you are into. To put in a nutshell, ERP is a package which integrates all departments and where as the accounting software is restricted to its own factual area.
