If you want to automate your business operations but still can’t make decisions between Enterprise Resource Planning (ERP) and accounting software, here is a comparison that might help you.
What is Accounting Software?
Accounting software functions as a solution for the finance and accounting department. Thus, it deals with almost all financial and accounting issues of a company, for example:
- Accounts payable
- Accounts receivable
- Cash flows
- Ledger and balance sheets
Furthermore, after data collection, accounting software can process important financial data to produce financial reports, such as balance sheets, income statements, profit and loss statements, and statements of cash flow. As a result, you can check the company’s financial health easily, which helps speed up the decision-making process while reducing the administrative labor cost.
The market leaders of accounting software around the world are Quickbooks and Xero. However, in Vietnam is MISA the most popular.
What is ERP?
ERP software is usually a comprehensive solution for multiple departments of an enterprise. For example, Epicor ERP comprises a number of modules, namely, financial management, supply chain management, customer relationship management, project management, production management, product data management, human resource management, sales management, service management, and planning and scheduling. All of these modules share a single integrated database and are customizable with regard to the need, size, and industry of the enterprise. Therefore, an ERP system can help increase productivity thanks to the automated cross-department data transmission and facilitate the business scale-up.
Comparison between ERP and accounting software
- Software scope – It is clear from the examples aforementioned that an ERP system includes accounting software.
- Benefit scope – Accounting software produces financial reports which give managers an insight into the enterprise’s financial health. On the other hand, an ERP system collects data from all departments and then generates reports on all operations of an organization. Thus, managers with the assistance of ERP have a more thorough overview of the company’s status. At the same time, they can make more accurate and effective decisions.
- Industry-specific design – As mentioned in the example of Epicor above, ERP is customizable to meet the needs of each industrial market and each user. However, accounting software rarely allows you to personalize its functions that way.
- Price – For those differences, it is understandable that ERP is more expensive than accounting software.
To sum up, you should consider implementing accounting software if your business is small, and your budget is tight. However, if you plan to scale up your business in the long run, it is worth investing in an ERP system. And if you still can’t make decisions which one you should have, contact us! You are more than welcome at Data V Tech!
Content writer: Ngoc Trang Vu