Differences between ERP Accounting Software and ERP Software

The last few years have witnessed significant changes to software for business management. Many companies have regarded the accounting software as a necessity. However, there are more and more businesses opting for ERP software instead. In fact, it has been observed that many users use the terms ERP and ERP accounting software interchangeably. But, when you know the key differences between the two, it will become easy for you to compare and contrast both.

Functionality of ERP software and accounting software

If you want to understand the differences between ERP software and accounting software, you need to understand the functionality offered by each of them. As the name indicates, accounting software is equipped to handle accounting transactions like trial balances, accounts payable, accounts receivable and payroll. There are some common modules that are typically clubbed with the accounting software like electronic payment, expense, time sheet, general ledger, purchase order, sales order, and billing.

There is no doubt that the accounting software has some similarity with the ERP functionality, but the two are slightly distinct from one another. ERP software is a system for resource management that tracks intangible and tangible assets, financial resources, human resources, and materials. On the other hand, the accounting software can be regarded as a subset of the former.

The example of the Dynamics GP modules from Microsoft can be cited as an example in this case. This Microsoft suite provides financial services like financial budgeting, planning, and management. Until a decade back, this collection would be called accounting software, but the scenario has changed now as it can have an interface with several other modules. As far as the Dynamics GP software from Microsoft is concerned, it can coordinate and manage business operations such as IT management, Human Resources, reporting and analysis, Supply Chain Management and projects as services.

While ERP software and ERP accounting software are two distinct things, the big question is does it really matter in today’s business environment? The last few years have witnessed several vendors of accounting packages end their operations or were merged with larger vendors. As several ERP platforms offer similar accounting functionality, why should you opt for a conventional accounting software bundle?

Accounting software is fading away

The key reason why both ERP software and ERP accounting software are often being used interchangeably in the market is the latter is slowly fading away. There are a lot of possibilities that the two applications will not exist in the market simultaneously in the present or in the future. So, addressing ERP as accounting software is not likely to trigger confusion.