What’s the Difference Between ERP and Accounting Software?

Running a small business may initially allow you to get away with using spreadsheets to track everything, but eventually, you’re going to begin scaling up. Once you do, you’ll discover the many weaknesses inherent in relying on outdated processes to keep up to date with your company’s sales progress. For example, spreadsheets are:

• Difficult to test or troubleshoot.
• Time-consuming.
• Prone to errors.
• Make collaboration difficult.
• Prone to security issues.
• Make scaling problematic.

In other words, it’ll be time to move on to using software that’s been made to deal with your company’s progress. For many companies, including those in the fashion industry, there’s a big draw toward using enterprise resource planning (ERP) or accounting software. Read on to find out which software option is right for you!

What is Accounting Software?

Accounting software allows you to take care of bookkeeping needs, along with accounts receivable and accounts payable. Additionally, you’ll be able to put together financial statements, including balance sheets and profit and loss reports. As you can see, accounting software can be quite helpful, but only if the sole thing you want to track is your financials.

What is ERP Software?

ERP software provides an integrated suite of options that can run almost every aspect of any business. For example, it’s common for ERP software to include applications for human resources, accounting, marketing, manufacturing, supply chain, sales, etc. Using an ERP allows managers to drive efficiency and discover process improvements, along with generating insights from multiple departments and automating your company’s practices.

ERP software dates back to the 1990s and has been utilized by big businesses for decades. We’ve recently entered a new age of cloud-based ERP software, which makes it easy for small businesses to use it, too.

What are the Differences between ERP & Accounting Software?

The biggest difference between ERP and accounting systems is their scope and scalability. Whereas accounting software makes it possible to track all aspects of accounting, an ERP gives you accounting plus an entire host of other important details. Basically, you have to ask yourself if you’d rather keep everything in its own specific software or if you prefer to use an integrated ERP to have all your necessary data on hand at the same time.

Pros and Cons of Using ERP

On the plus side, virtually all aspects of your business can be managed by an ERP. It’s also scalable so that you can grow from a small business all the way up to a large enterprise. ERP software can generate insights into every different business operating area. For instance, you can generate financial reports and reports related to human resources. These reports also have the ability to use operational and financial data, regardless of which department you run them for.

ERP software will cost more to use than accounting software. However, small businesses can get an affordable solution. There will also be an extensive learning curve if you want to use its full capabilities. Additionally, you cannot deploy an ERP without an analyzed business case.

Pros and Cons of Using Accounting Software 

Accounting software, meanwhile, is quite easy to deploy, and small businesses have found it to be relatively inexpensive. It also has the benefit of not requiring extensive training. Instead, self-training will most likely be sufficient.

On the downside, this software solely focuses on the bookkeeping aspects of your company. For example, it can produce reports, but only on financial data. It also provides a limited analysis of insights since, once again, it can only pull financial information. Finally, it’s much more difficult to scale up due to limited licenses.

Is an ERP better for your Fashion Business?

If you want your business to run efficiently, then you absolutely need to choose an ERP. Unlike accounting software that can only track financial data, using an ERP gives you an easy way to streamline everything into one place. By running your business processes together, you can make sure that everything moves forward as expected.

Using an ERP allows you to:

• Track products from their initial design all the way to completion and beyond.
• Reduce your margin of error.
• Process customer orders.
• Manage your customer relations.
• Standardize work processes.
• Improve supply chain management.
• Efficiently manage your inventory.
• Improve customer service.

In other words, if you’re still trying to decide between ERP vs accounting software, the answer is clear. ERP accounting software provides you with so much more than simple accounting software does, including inventory accounting software! Although the initial cost will probably be more, you’ll end up saving a ton of money in the long run.

Free Demo for ERP Software

Are you looking for ERP software that can be set up easily, streamline your operations and transactions, automate your inventory and manage purchasing, allow scalability, and have a 99% client retention rate? Look no further! Request your free demo today!