Meeting the Needs of Your Accounting Team
Your accounting team is an essential facet of your organization. Tasked with managing your financial health in today’s digital economy, your accounting team members enjoy high-tech tools that help them operate at scale. But it wasn’t always this way.
Prior to the emergence of modern accounting software, organizations utilized the services of bookkeepers. According to Investopedia, “Bookkeepers most likely emerged while society was still using the barter system to trade (before 2000 B.C.) rather than a cash-and-commerce economy.” Using pen and paper (or quill and parchment), they noted debits and credits, first through a single-entry system, then through the double-entry system in transaction journals.
Glossing over much of the history, technology in the form of accounting software replaced these manual and paper-intensive processes. Now, single or multi-entity businesses use the software to automate their tasks. The reward is enhanced efficiency in gathering, organizing, and analyzing their financial data and with the growth of their business. However, because technology continues to evolve, there have been further improvements to accounting software in the form of accounting ERP (or accounting software within a cloud ERP solution).
If you’re wondering what’s the difference between ERP and accounting software and whether you need to rethink your accounting strategy, then looking at the benefits of each will help you determine your next steps.
The Benefits of Accounting Software
Accounting software is an application that allows businesses to handle their accounting transactions, from accounts receivable (AR), accounts payable (AP), and bank management to revenue tracking and financial reporting. It’s a stand-alone solution with specific functionality, and it does its job commendably.
- Eliminates manual data input
- Improves data accuracy
- Supplies built-in financial reports
- Simplifies payroll and tax filing requirements
- Reduces staff costs
- Centralizes accounting data for easy access
It does more, but the takeaway is that accounting software automates and streamlines your accounting and financial processes while greatly benefitting your accounting team—and your bottom line. With such wonderful benefits, you may wonder, “What’s the difference between ERP and accounting software?”
When to Consider Moving to an ERP Software
An ERP solution is an end-to-end business management tool that connects multiple departments and applications. Information from finances, sales, marketing, operations, and any third-party application coalesces into the ERP system, making it easy to access the business-wide data in real time. The result is a 360-degree-view of the business and real-time access to synchronized data.
Within the ERP solution is the basic accounting functionality provided by accounting software, but the ERP takes that functionality a step further. For example, if your business is in the manufacturing, distribution, or commerce industries, then you’re dealing with supply chain logistics, inventory tracking, warehouse management, and more. The ERP solution will help you manage those evolving needs with advanced financial management capabilities (e.g., using accounting data for planning, investing, and compliance processes) as well as with industry-specific modules. Your basic accounting software will not.
Let’s look at QuickBooks as an example. Unlike a full-featured ERP, QuickBooks is entry-level accounting software that doesn’t provide automated communication with customers, doesn’t offer sophisticated reporting (and dashboards), and doesn’t scale with growing companies. It’s sufficient for start-ups and smaller businesses—until they’re ready to take their success to the next level.
Which ERP Systems Are Best
The differences between ERP and accounting software are clear. Now, it’s up to you and your accounting team to determine whether it’s time to upgrade to a comprehensive business management tool or to stay with accounting software that does its job but little else.
If you agree that accounting ERP would benefit your business, then the next step is to find the solution that is best for you and your unique needs. There are plenty of ERP solutions to choose from, and you’re going to want to do a thorough ERP research and ERP evaluation, answering such questions as:
- Does this ERP provide the applications my company needs?
- Can I tailor this ERP for my business?
- Can I seamlessly integrate third-party applications?
- Is CRM built into the solution?
- Does the ERP provide reporting and analytics functionality for today and the future?
You’ll also want to find out how the ERP solution is deployed. Does an ERP solution you’re considering have a choice in hosting, such as cloud-based, on-premises, or a hybrid approach? Hosting the solution on-premises requires an initial investment in hardware, which is then installed in your building. Your IT staff will be responsible for updates, upgrades, and security. Cloud-based solutions requires no hardware and puts the onus of managing the hardware—and all that it entails—in the hands of the ERP vendor. Hybrid options give you a cloud solution in a private environment.
Evaluating your accounting ERP options carefully before selecting the right one will go a long way in ensuring a successful ERP implementation.
How Acumatica Can Help
Though finding the best ERP system for you can be a daunting task, it is worth it. Here at Acumatica, we have many customers who have happily made the switch from accounting software to Acumatica’s award-winning accounting ERP, such as Fidelux Lighting.
This women-led and minority-owned company designs and distributes top-tier LED lighting solutions for commercial customers. They were using QuickBooks, but tracking/paying commissions, managing their inventory, and handling their accounting was too much for the simple solution. Additionally, QuickBooks limited their ability to track inventory, it wasn’t customizable, and it did not allow integrations with other software.
Director of Operations Shivani Raval says in the company’s customer success story, “As we move into new markets, Acumatica gives us the confidence that we can handle the transactions and growth with ease for many years.” (Visit this page to hear more from the Fidelux team on why they selected Acumatica over other providers.)
As with Fidelux Lighting, you use Acumatica’s comprehensive cloud ERP solution to manage your accounting and financial needs, while also benefitting from additional industry-specific modules and having access to it all whenever you need, from wherever you’re located. To learn more, contact our team today. And if you’re curious why companies like yours chose to upgrade to Acumatica Cloud ERP from Quickbooks, hear from them below on how our modern, cloud-based platform helps their businesses grow.