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Enterprise Resource Planning ERP versus Accounting Software.

Posted by admin at February 2, 2015 in ERP Software

ERP versus Accounting? Many Small and Medium Size (SME) businesses are unfamiliar with the difference between an Enterprise Resource Planning (ERP) and an Accounting SoftwareWhile there is some crossover with ERP functionality, the two are slightly different.

ERP software is a resource management system, tracking tangible and intangible assets, materials, human resources, and financial resources. Financial resources may jump out at you, but note that ERP software covers a range of functionality not generally offered by accounting software, often factoring in intangibles like human work hours, product life-cycles, performance units, and customer relations.

ERP versus accountingAccounting package handles only individual business functions of accounts whereas Enterprise Resource Planning (ERP) package handles the entire range of business functions of an organization. Simply put, accounting software, as it is traditionally known, is a subset of any ERP bundle.

Thus, Enterprise Resource Planning for SME is a fully integrated business management system covering functional areas of an enterprise. It organizes and integrates operation processes and information flows to make optimum use of resources such as men, material, money and machine.

ERP is a tightly integrated closed loop business solution package. In the case of a manufacturer, an ERP system enhances the company's ability to accurately schedule production, fully utilize capacity, reduce inventory, and meet promised shipping dates.

Accounting software as we traditionally know it is becoming less relevant over time. This is why accounting software and ERP software have come to mean similar things in today’s market. More complex software solutions are replacing its function. Industry attitudes have moved on from this dated concept of accounting software, so it’s possible that ERP software may completely co-opt its meaning as well as its functional place in the market.

Given that the two are unlikely to exist simultaneously in the market now or in the future, referring to ERP as accounting software is unlikely to cause confusion.

Further Reading:

What is ERP? 20 of the best Enterprise Resource Planning definitions

Enterprise Resource Planning (ERP): What businesses need to know.

ERP and MRP software - what do they actually mean?

To ERP or Not to ERP: Should SMB's Invest in Enterprise Resource Planning?

The What, Who and Why of ERP - discussion.

6 thoughts on “Enterprise Resource Planning ERP versus Accounting Software.

    1. Mark Preece Post author

      Thank you for those kinds words there will be regular posts commencing shortly. Watch out for our new App named H2t that can be downloaded from Google Play and App Store in the next week or so.

      Reply
  1. Avtapps

    ERP software is a resource management system, tracking tangible and intangible assets, materials, human resources, and financial resources. While Accounting software, as the name itself indicates, deals with accounting transactions such as payroll, accounts receivable, accounts payable, trial balances etc. Common modules bundled with accounting software include billing, sales order, purchase order, general ledger, timesheet, expense, and electronic payment.

    Reply
    1. Mark Preece Post author

      That is a full and clear distinction Avtapps. I am sure other readers will appreciate it, as we do. Thank you for your comment. The H2t ERP Page will shortly undergo an upgrade so drop bye in a week or so. Many thanks. Ride the Wave. 🙂

      Reply

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