The main difference between ERP and accounting software is based on their functionality, range, design, outputs not to mention size. Accounting software lately has been utilized as synonym to ERP that is possibly most misleading to general people, accounting software continues to be and can remain probably the most important area of the Enterprise resource planning software as companies run based on accurate accounting but ERP is a lot more than only accounting. Organizations doesn’t have just one aspect accounting, there are lots of other facets of a company so that as organization grow in dimensions and business volume increases couple of more aspects enter into picture or become essential like SCM, Marketing, Hr, Multiple Inventory, SFA, logistics etc.
Enterprise resource planning software covers all of the possible facets of promising small to large organizations including accounting and integrates all of the facets of a company under one seamless software to permit the data to circulate in one department to a different instantly and convey consolidated outputs which could reflect status of entire organization. Enterprise resource planning software programs are resource keeper which is capable of doing dealing with the activities of the organization, as with situation of producing it may begin with monitoring raw material suppliers as much as post sales records of end product. Whereas accounting software monitors money flow by processing account receivables and payables and generate reports which display the precise standing of the organization when it comes to profit and loss.
The confusion concerning the distinction between ERP and accounting software is continuing to grow largely because of the fact that the majority of the ERP software companies either had established accounting software around that they build an ERP or they required over small accounting software companies to build up Enterprise resource planning software. To recognize the large distinction between ERP and accounting software one should realize that accounting software starts from purchase, purchase, cash and bank vouchers and finishes at balance sheet explaining the financial status from the organization within given period.
Whereas enterprise resource planning goes much beyond than simple accounting and may even predict future losses or profits, altering market trends, better possibilities, methods to increase income, lowering price of production, improving quality of end product, identifying untouched markets etc., also it can provide this complete information towards the management in a single consolidated format. Therefore, the distinction between ERP and accounting is the fact that ERP is really a tool which doesn’t simply explains how clients are running but it may also suggest how you can run it better for earning greater profits.
With creation of ERP, organizations can easily work on multiple distant geographical locations and may get consolidated status of entire organization in the headquarter everyday. This really is another distinction between ERP and accounting software. Though quality accounting software may also handle multiple accounting systems and sophisticated transactions but ERP can offer much deeper look at each location’s daily working and ensures strict following of general policies and rules at each step without manual monitoring. Changes could be implemented within the working in the mind quarters and individuals get implemented by one stroke at each location, thus Enterprise resource planning software gives much better control towards the management as well as updated and consolidated information at each key to make correct decisions.