Whatever your business size or industry, it’s essential to keep your finances in order if you want your company to perform at its best. If you’re here, you’re probably already aware that accounting software can speed up the financial management process while minimizing errors and inconsistencies. But with so many options available, how do you narrow them down?

Compare Top ERP Software Leaders

The first step in this process is figuring out what kind of platform you’re looking for. Some businesses find that standalone accounting software meets their needs, but others prefer to use a fully featured ERP suite for their accounting operations.

In this article, we’ll break down the differences between ERP and accounting software to help you figure out which option best meets your business needs.

Article Roadmap

• What Is ERP Software?
• The ERP Process
• Benefits of ERP Accounting
• What About Standalone Accounting Software?
• The Accounting Process
• Benefits of Standalone Accounting
• Next Steps

What Is ERP Software?

ERP (enterprise resource planning) software is a platform that helps businesses with all aspects of their everyday operations by unifying various software modules into a single dashboard. Using this software makes it easy to manage specific parts of your business, including accounting operations.

ERP accounting modules can automatically log information as transactions and transfers occur and copy the data between databases and ledgers, reducing the likelihood of typos and errors while speeding up the data entry process. They can also easily integrate with other ERP modules within the same software suite, painting a complete picture of your operations at any given moment.

According to Gabrielle Marie Yap of CarnivoreStyle, “Having accounting seamlessly woven into an ERP system means data sharing across various departments…It’s like having a well-choreographed dance between different business functions.”

However, there are many more elements of business alongside accounting that ERP software can handle. Let’s take a look at the ERP process and identify how software helps with each stage.

The ERP Process

Accounting

ERP accounting modules — like standalone software — make use of automated data entry, visualizations and reports to improve your efficiency and reduce errors, but as mentioned above, choosing an ERP accounting module means guaranteed integration with other aspects of your business. Standalone accounting software typically requires external help to integrate with other modules.

Procurement

ERP software’s procurement module helps ensure that you have what you need to complete the manufacturing process for any of your products. It allows you to set reorders to trigger automatically at certain thresholds, and integrates with accounting software to ensure that accounts payable and general ledgers are updated accordingly when purchasing materials.

Shipping and Distribution

When it’s time to fulfill purchase orders and get your products to customers, ERP software’s distribution modules can assist in collecting payments and coordinating shipments. The software automatically updates clients on the status of their orders and pinpoints which of your warehouses will allow you to carry out the delivery in the most efficient way.

CRM

It’s important to maintain good working relationships with your customers, and customer relationship management (CRM) ERP modules are built to do just that. Whether it’s receiving feedback and support requests, updating order statuses or setting up recurring orders, CRM helps you streamline communication between you and your clients so you can respond to their needs faster and ensure repeat business.

Compare Top ERP Software Leaders

Using ERP for Accounting

Now that we have established the definition and the process of ERP, let’s look at the benefits of using ERP for accounting.

A Full Business Solution

Using a full ERP suite rather than a standalone accounting software system ensures you won’t need to worry about integrating new software into your existing workflow. The entire process is already covered by the included modules, eliminating any issues that may come with trying to work with different brands and types of software.

Information Consistency Between Modules

Using ERP accounting software to automatically log and copy transaction data between accounting databases and ERP modules reduces errors and inconsistencies that can happen during manual data transfers, saving time and headaches down the line.

Unified Support

A full suite of ERP software means your technical support will be able to handle an entire system of software rather than several different pieces from different vendors. If you opt for a subscription or software-as-a-service deployment, you’ll have access to the vendor’s support team as well rather than having to train your own.

In Summary

While it comes with a higher cost of entry and is most suited for larger businesses, ERP accounting software is well worth the investment for a complete solution that can handle finances and databases alongside modules that cover even more business aspects.

What About Standalone Accounting Software?

Depending on your business needs, it may be more appropriate for you to opt for a smaller, standalone accounting system rather than a full ERP suite. These systems typically have a lower cost of entry than a full suite, and often contain functionality to help you integrate it with other software platforms you’re already using.

Let’s take a quick look at the various elements of accounting that software can make much easier for your business.

Compare Top Accounting Software Leaders

The Accounting Process

General Ledger

The general ledger is where all of your business’s financial data and transactions are logged. By using accounting software to handle it, every transaction you make will automatically have its data added to the necessary database and accurately shared to other locations that need it.

Accounts Payable and Receivable

Accounts payable is the short-term log of what you owe to other businesses, and accounts receivable logs what others owe to you. These databases can be synchronized with your general ledger using accounting software, automatically populating and resolving them as transactions occur.

Invoicing and Billing

For short- and long-term debts owed to your business, it’s important to send bills and invoices to ensure you’re getting paid on time. Accounting software can help you design, print, send and reconcile these invoices, making sure the information is correctly logged and payments are received when requested.

Benefits of Standalone Accounting Software

After going through the benefits of ERP for accounting, it is time to look at the benefits of standalone accounting software.

Lower Cost of Entry

You won’t pay as much out of pocket when adopting standalone accounting software as you will when using an entire ERP suite, making it an ideal option for smaller businesses without as much funding to work with. Many accounting software providers offer a cloud-based subscription model as well, allowing you to pay as you go without having to make a large payment up front.

Easier Onboarding for Employees

Instead of introducing an entirely new ERP system, you can reduce onboarding time if you only introduce one new accounting software system to your organization. This will ensure that your employees won’t have to spend as many hours learning new software — a smaller addition to your system will be much simpler to learn and implement.

Greater Focus on Accounting

According to Yap, “One of the major perks of standalone software is the focused attention it gives to accounting tasks…This specialized focus often results in a user-friendly interface and streamlined processes, making it easier for businesses to manage financial transactions, generate reports and keep a close eye on the overall financial health of the company.”

In Summary

While not as robust a solution as a complete ERP suite, standalone accounting software is a more cost-effective option for smaller businesses that still contains all the features they require to handle finances.

Compare Top Accounting Software Leaders

Next Steps

Whether you’re using a standalone accounting software option or you’re looking to adopt a full-fledged ERP suite to handle your finances, you’ll have access to powerful tools built for optimizing your accounting process. There are plenty of options available on the market, so be sure to choose the right vendor for your business. You can see how top products stack up across a range of features with our free comparison report.

Which do you think fits your business better — ERP software or standalone accounting software? Are there any parts of the process you find software helps with more than others? Let us know in the comments.

Contributing Thought Leaders