To many people, the terms “ERP” (Enterprise Resource Planning) and “Accounting Software” are interchangeable. This misconception, however, ends up being a detriment to companies when purchasing decisions are based on the comparison of apples to oranges, i.e. two distinctly different products.
So what is the difference between ERP and accounting software? In short, accounting programs are merely a subset of the core ERP software capabilities and represent a fraction of the functionality provided by comprehensive ERP. This truth, however, is just the tip of the iceberg.
Predictably, accounting software deals with the financial aspect of operations by recording business transactions: AR/AP, journal entries, and general ledger utilized to produce basic financial reports like income statements and balance sheets. Due to this specified but limited focus, the accounting software market has experienced some instability with providers resorting to buyouts or ceasing operations altogether. Why?
Accounting software provides a good snapshot of a company’s financial health today but lacks the ability to anticipate tomorrow. Without data-driven forecasting, companies base business decisions primarily on SWAG (Scientific Wild Assumption Guessing) to predict supply and demand for products and services causing many to fall short of their profitability goals.
Accounting functionality comprises just one subset of the overall solution. ERP’s main objective is to facilitate the day-to-day management of business operations by incorporating data from multiple aspects of the business into a seamless and comprehensive information system. ERP encompasses: Order Entry, Financials, CRM, Reporting, Purchasing, Inventory Control, Warehouse Management (automation/scanning), Serial/Lot Control, QC Tracking, Label Generation, Kitting/Assembly, Secondary Processing, and more along with supplementary functionality of E-commerce, API, EDI, and Mobile Apps.
By accurately processing and analyzing data through these company-wide functions, ERP software delivers forecasting integral to improving the timing of sales and inventory, detecting process deficiencies, and identifying strategic enhancements for growing productivity and competitive advantage.
What’s Best for You?
Because businesses demand a more complete software solution, ERP continues to consume the accounting software market. Understanding the differences in software functionality is critical to your company’s near and long-term success. If you’re currently investigating software options for your enterprise, Distribution One can help. Our experienced team will listen to your needs, answer your questions, and explain the benefits of our comprehensive ERP software functionality.
Every single customer has unlocked transformational improvements using Distribution One’s ERP-ONE software solution. Now it’s your turn!
“Out of the gate, our first cost savings occurred in accounting. What was previously a full-time job went down to just 2 hours a day. This change alone saved us $40,000 in year-over-year labor costs.”
Empire Bolt & Screw
“Distribution One has allowed us to deliver 30% more orders without having to increase our labor force.”
“ERP-ONE actually helps our business be more productive. We operate more efficiently because our software performs like a world-class product. And that’s not marketing hype. We trust in its reliability. It is one of the best decisions our company made.”
The Nut Place
“ERP-ONE tracks product costs and sales margins for us… that benefit alone has added 4% to our bottom line after the first year of implementation and has more than paid for the cost of ERP-ONE.”
Colorado Industrial Packaging
“Enhanced productivity, lower operational costs, higher service levels, and stronger customer relationships—it’s all been attained through our ability to provide continuous real-time data generated through the myriad of programs within ERP-ONE.”
-President & CEO
A-Jax Fasteners and Tools
“Having spent 30 years on the operations side of distribution using SAP and AS400 software, I have not encountered a better system than ERP-ONE. The efficiencies and expandability has allowed us to improve our sales by $500,000 per employee in a year.”
-Chief Operating Officer
“We had immediate visibility into which sales representatives were performing and which product lines were providing the best return for our business.”
On Time Supply
“The ability to manage orders online has created greater efficiency in their business and has delivered more flexibility in modifying and tracking orders. Changes to an order instantly cascade all the way through the terminals and the processing stations cutting production time by at least 15%.”