What is an ERP software
ERP also called as Enterprise Resource Planning refers to software that is used by small medium and large businesses in order to manage and maintain daily business activities such as sales, and purchases. Accounting, Procurement, Production etc. An ERP solution also helps you with enhancing the enterprise performance and provides you with reports that help you to achieve the business goals and financial management.
ERP systems are tied together with various business workflows and departmental processes. Each department handles various duties and responsibilities such as a Sales team will manage the leads, quotations, Sales orders etc. similarly based on the sales happening within the business procurement department will buy the raw material in order to manufacture the product or if its a simple Trading organization then they will purchase the products from the Manufacturing company. Further, all the other operations such as delivery payments, resource handling, customer relationship, and management will take place.
All the above activities with the manual interface will take time to complete therefore in order to ensure this information and exchange of data between departments is quicker, ERP software has been implemented by businesses. ERP not only tightly integrate all these departments but also ensure there is no duplication of task within departments.
ERP software has been initiated as MRP software way back in the 1960s just to manage Materials Requirements Planning in the later stages and development of software technologies new modules has been added to enhance the complete MRP to MRP 2 and then the start of ERP solution. ERP today is the heart of any organization if implemented correctly as it ensures all the data is perfectly matched including the accounting and financial reports.
ERP software and solution implemented in any organization provides you with transparency with complete tracking of every aspect of the business such as Manufacturing accounting logistics accounting and so on. This Software acts as a central hub for all the workflows across departments with data.
What’s the difference between ERP and Accounting software?
Although the term “Accounting” is often used when describing ERP software, Accounting software and ERP are not the same things. Accounting is a subset of the module within an ERP solution. Accounting can be considered as a single module where finance and other accounting entries are posted such as payables receivable etc. Whereas an ERP handles the Accounting + other lists of departments such as project management, sales, purchase, etc.