Many small and medium-sized companies may be thinking that it’s time to upgrade their business IT systems, but they’re not sure if they’re ready to go ahead along with implement a full ERP solution, or whether they should go for a standalone accounting software product. Here, we explain the differences and attempt to help you decide which of the two you need.
As the name would imply, an accounting package handles only the accounting selling functions. Enterprise Resource Planning (ERP) software handles an entire range of business functions covering functional areas like accounting and finance, professional services automation, HR and payroll, Customer Relationship Management (CRM), inventory and supply chain, project management and more.
When deciding whether to implement ERP software or accounting software in your business, ask yourself the following questions:
If you purchase standalone accounting software, will you be using a separate piece of software to manage your leads, customers, partners and vendors (i.e. CRM software), another piece of software to manage your stock, and yet a new one to manage your projects?
Think about how many separate point solutions you will need to manage and maintain. One of the biggest downsides of having multiple systems across your industry is that IT management can become a nightmare. Customizing these systems, integrating them and maintaining them with patches and upgrades can be complex, costly and use up critical time and resources.
Whilst it is likely that you can integrate some of these disparate solutions so that they feed each other information, you’re still left managing quite a lot of systems at the same time. And when various front- and back-end systems run separately, it can wreak havoc on the processes that are meant to guarantee your company is running smoothly.
If you believe that you will be managing several point solutions as well as your accounting software, perhaps it’s time to consider investing in an ERP system.
ERP software integrates these systems so that every business function relies on a single database. This means you only have one system to worry about. And by way of only one source of information, your staff have easier access to data and duplicated effort is therefore reduced.
If you are planning growth, then it makes sense for you to consider ERP software. Do you risk investing in standalone accounting software now, only to replace them each and every one with an ERP three years down the line?
Whilst many accounting packages are great for small and medium businesses, they may start to struggle to cope with high volume companies and larger enterprises. So if you choose an accounting package now and you achieve growth, then bear in mind that you may outgrow the system’s capabilities and have to upgrade to a more feature-rich ERP key at a later date.