SOFTWARE VS. SYSTEM

A piece of a larger puzzle

The terms ‘accounting software’ and ‘ERP’ are often used interchangeably, but there is a vast difference among the two. The casual interchangeability in the usage of the two terms has caused confusion among some SMEs about what is the exact difference between the software and the system. The confusion between the two may have risen as companies that offered accounting software added more features and modules overtime and expanded into full ERP solution providers.

The accounting software that companies used previously dealt solely with financial transactions. The sales of goods, purchase of materials and order tracking were the main features of software solution. Accounting softwares include accounting information such as accounts payable, accounts receivable, trial balances etc. Other frequently bundled functions include billing, expenses, time sheets and sales and purchase orders.

Enterprise resource planning systems encompasses a much broader area and address more business functions. The ERP package covers functions beyond accounting and also factors in qualitative and intangible data. Production planning, ordering, customer relationship management, warehousing, inventory tracking, business intelligence business analytics are comprised within the ERP package. An organization with a fully implemented ERP has greater integration of data and information, better intra-organizational communication and streamlined processes. ERP systems allow a more in-depth view of each function of the organization. Thus ERP results greater transparency and control and by providing real time automatic reports it allows managers to make quick and correct business decisions.

Let’s take the ExpandERP system as an example which offers accounting solutions with financial management, budgeting, receipts and payments included. The package offers much more with customer relationship management, export, procurement and business intelligence modules as well. The entire system integrates and combines the data and with its business intelligence can help predict future profits and losses, lower cost of production by increasing purchase order efficiency, lower operational costs and over time boost the company’s growth.

An accounting software is a part of the ERP package. One can view the accounting solution as a part of the larger jigsaw puzzle that is ERP. While the system would be incomplete without the accounting part, it consists of far more parts that are combined together to form the big integrated ERP picture. Enterprise resource planning offers more than just financial book-keeping and delves into making the whole companies processes as streamlined and efficient as possible. Though the accounting and financial management module is one of the most integral part of the ERP package, its functionalities go far beyond.



Contributor : Vidushi