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 and employ 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 feel like

What’s the difference?

As the name would imply, an accounting package handles only the office business functions. Enterprise Resource Planning (ERP) software handles an entire range of business functions covering functional areas like accounting and finance, proficient services automation, HR and payroll, Customer Relationship Management (CRM), inventory and supply chain, project management and more.

How many disparate systems will you have to manage?

If you purchase standalone accounting software, will you be using a separate member of software to manage your leads, customers, partners and vendors, another piece of software to manage your stock, and yet another one to deal with your projects?

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 with only one source of information, your staff have easier access to data and duplicated effort is therefore reduced.

Are you planning business growth?

If you are planning growth, then it makes sense for you to consider ERP software. Do you risk investing in standalone accounting software now (and potentially two or three other top solutions), only to replace them all 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 solution at a later date.

Do staff outside of your accounting team need visibility of certain financial data?

When each department in a company has their own separate system designed to complete their own tasks, this means they can only see the business data that is within that system. So it’s usually the case that only people in your the books department can view financial data.

Do you need to be able to report on KPIs across your entire business?

Despite your chosen accounting software probably offering good reporting and analytics tools, the problem is it won’t pull together data from across your entire organization. Your reports will only include financial data and won’t tie in data from other parts of the business, such as sales or stock levels. For example, you may need to create a sales order vs. invoice report which you can only get by linking your financials to your CRM software.

ERP software provides powerful reporting tools and searches capabilities because it incorporates all key business data from across the whole business. This revenue, provided you have the access rights, you’re able to locate any type of data you need from any sector quickly and easily. You can then create accurate reports on key aspects of your business.