Accounting software records money after it has moved. An ERP records the work that makes the money move — and accounting is one of its modules. For a small company with simple sales and no stock, a good accounting package may be all you need. The trouble starts when the business becomes operational.
What accounting software is good at
Ledgers, invoices, bank reconciliation, VAT returns and financial statements. It is built for bookkeepers and accountants, and does that job well. What it usually does not know about is everything that happens before an invoice exists.
What accounting software does not see
- The quotation and its approval — who agreed the price, and whether it changed after the order.
- Purchasing and receiving — whether the goods you are being billed for have actually arrived, and in what quantity.
- Stock and production — what is on the shelf, what a product consumed, what was rejected.
- People — attendance, overtime, advances and the payroll that follows.
- Service work — the inspection, the test results and the report that justify the invoice.
An ERP holds all of that in the same database as the ledger, so the figures in the books are traceable to the documents behind them.
A simple test
Ask three questions. Can you see, from one record, whether a customer’s order has been approved, bought, delivered and invoiced? Can you stop a purchase payment from exceeding what the order still owes? Can you produce the approval trail behind any figure in the accounts? If the answer is “only by asking people”, you have outgrown a ledger package.
Do you have to replace your accountant’s software?
Not necessarily. Some companies keep external accountants on their own package and use the ERP for operations and internal accounts. Others move fully. What matters is that the operational records are in one connected system. See how the Finance workspace handles vouchers, expenses, receivable and payable, and how the cost of an ERP is decided.