Do you know that an Enterprise Resource Planning (ERP) system and accounting software are not one and the same? Between them, there are some common features as both support financial management and accounting processes. However an ERP offers more functionality and value with the integration of processes across your organisation, whereas an accounting software is really just designed to specifically support your finance teams in simplifying the basic financial requirements.
As your company grows and transforms, you will need to automate and digitalise your business processes by upgrading to a proper ERP solution. So, to help you make a more informed decision, we have listed out their fundamental differences in the table below.
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Accounting Software
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ERP System
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Scope and Integration
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Focuses primarily on accounting functions like bookkeeping, invoicing, and financial reporting.
It may not have the same level of integration with other business processes, leading to potential data silos and manual data entry.
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Integrates various business processes beyond accounting, such as human resources, supply chain management, customer relationship management, and more.
It provides a centralised database that enables seamless data flow and real-time information sharing across different departments.
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Data Visibility
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Typically provides limited visibility into other business functions. Users may need to switch between different software applications to access data from different departments, leading to potential inefficiencies.
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Offers a holistic view of the organisation's data, allowing stakeholders to access information from multiple departments in real-time. This can lead to better decision-making, as all relevant data is available in one system.
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Efficiency and Automation
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May require more manual effort for data entry and coordination between departments. Automation features are often limited to accounting-related tasks.
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Automates and streamlines various business processes, reducing the need for manual data entry and minimizing errors. It can automate workflows across different departments, enhancing overall operational efficiency.
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Scalability
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May face limitations in scalability, leading to potential challenges when a business grows and requires more comprehensive solutions.
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Designed to accommodate the growth of an organisation. It can scale to meet the changing needs of a business as it expands, adding modules and functionalities as required.
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Customisation
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Customisation options may be more limited, and businesses may need to adapt their processes to fit within the constraints of the software.
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Often provides a high degree of customisation to meet the specific needs of a business. It allows for the adaptation of workflows and processes to align with unique organisational requirements.
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Collaboration and Communication
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Collaboration features may be more limited, and communication between departments may rely on external tools.
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Facilitates improved collaboration and communication between different departments by providing a unified platform. This can enhance teamwork and coordination.
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The choice between the two depends on the specific needs and size of your organisation.
If you are a smaller business with simpler requirements, then a basic accounting software would suffice. With various reputable accounting software in the market like Xero or Quickbooks, you can speed up the collection and processing of key financial data and streamline financial reporting.
However if your organisation is looking to optimise your digitalisation benefits of efficiency, scalability, and collaboration across different departments, then you can consider a robust ERP system like Microsoft Dynamics Business Central. Designed for SMEs, Business Central (BC) offers a true cloud, all-in-one business management solution that also doesn’t compromise on cybersecurity and data protection as you go digital.
If you’d like to learn more about how an ERP system could potentially benefit your organisation, feel free to get in touch for a non-obligation ERP consult and Business Central ERP software demo. We will help you identify the best ERP cloud software for you.
You can also enjoy up to 50% EDG ERP Accounting software grant support.
About Stone Forest IT (SFIT)
As the ERP Manager for Accountants, Stone Forest IT has over 35 years of experience in helping SMEs across industries set up and manage their ERP systems with best practices and governance. Backed by a team of certified digital consultants, we have expertise in Microsoft and Sage ERP solutions. SFIT is also a Microsoft Gold partner for Modern Work.
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