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Do Small Businesses Need ERP Accounting Software and Can They Benefit from It?

When it comes to running a business today there is no denying the need for technology to make things easier. In some instances, you even need technology just to gain a competitive advantage.

Because of the constant high demand for software solutions, there has developed a rather abundant supply. This has led to difficulties for small businesses to determine which solutions are right for them.

For example, should a small business stick to simple accounting software or is ERP better suited? What’s the difference between the two?

If you’re looking for software solutions to assist in streamlining some of your processes, take a look at whether or not small businesses can benefit from ERP accounting software.

What is ERP?

ERP stands for Enterprise Resource Planning. In the past, ERP was typically something that only larger corporations would find a use for. However, as mentioned today every business needs every advantage it can get on its competitors.

In the case of larger corporation’s ERP is a key tool in managing the key tasks of a business lifecycle. ERP can also supervise business resources between stakeholders such as materials, revenue, and staffing.

Small businesses today can benefit from ERP being applied across multiple industries. There are currently many benefits for small businesses who choose to use ERP accounting software.

The Difference Between ERP and Accounting Software

One of the biggest differences between ERP and accounting software is their capabilities. Accounting software is strictly what the name implies. It is a financial software solution which can be used for accounts payable and receivable and payroll.

ERP is a resource management software solution. ERP has all the capabilities of accounting software and then some. Not only will ERP track and manage the company’s financials, but also human resources, materials, and assets.

Since ERP does all the same as accounting software but with more, it would be safe to say that accounting software is a subset of ERP.

ERP or Accounting Software?

As far as deciding whether or not your small business needs ERP or should just stick with some simple accounting software, remember the golden rule of business. Account for growth and expansion.

When accounting for the future growth and expansion of your business, ERP seems like the better choice. It will provide all the features of accounting software while allowing more resource planning features in other areas of the company.

Let’s take a look at some of the added benefits to using ERP for your small business needs.

  • Lower Costs – Save money on one software system as opposed to multiple for the same work.
  • Streamlined Data Flow – Everything is easily accessible under the one software program.
  • Improved Decision Making – With the ease of access, confidence come in the ability to retrieve necessary data and make decisions accordingly.
  • Increase Sales – With a streamlined data flow and improved decision making, sales will naturally increase in response.

Because the ERP software helps organize everything under one application it is easy for it to expand and grow with your company. Taking on more tasks and handling larger amounts of data.

Making the Leap to ERP

Finally deciding on a software solution is no easy task. Especially, when there is still the daunting hunt for the right provider. After all, knowing what services you need is only half the battle.

Before making any rash decision or big changes to the operation of your company, make sure it fits in the budget. While there are many services that small businesses can benefit from, not all are cost effective.

While ERP does save your company money in the long run, the initial investment could be a bit too steep at the moment. But, if you can afford it, it could benefit your company greatly.

ERP and Beyond

ERP has a great many benefits for small businesses including cutting operating costs, streamlined data flow, and improved decision making. However, ERP software is often compared to accounting software.

The truth is accounting software is a subset of ERP. ERP includes management for financials with ERP’s own accounting software, management for human resources and more.

ERP offers the most benefit to small businesses wishing to grow and expand in their future.

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About the Author: Praveen Unnikrishnan

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