Whether you’re new to this field or you’ve been in it a while, it’s easy to confuse ERP and accounting software. While there is some overlap between enterprise resource planning (ERP) and accounting software, there are far more differences than similarities. Keep reading to discover the differences between ERP and accounting software.

What Is ERP?

The first key to understanding where accounting and ERP diverge is in learning just what enterprise resource planning is. At its simplest, ERP software is used to manage a variety of daily business activities. This includes everything from project management and compliance to risk operations and accounting. Eagle-eyed readers will notice the word “accounting” in that list—good catch!

You can think of ERP’s relationship with accounting software as that of four-sided shapes and squares: all squares are four-sided, but not all four-sided shapes are squares. ERP software can handle financial tasks and a lot more, while accounting software is only meant for the financials.

A Wall of Bricks vs. One Brick

In a wall made of bricks, every brick is important. Accounting is one of the bricks in your facility’s wall; if you remove that brick, your facility won’t be able to stand on its own. However, a wall is made up of many more bricks than one. With accounting software, you know you have one solid brick, but what about all the other factors that go into managing your facility?

It doesn’t make sense to have a unique piece of software to manage accounting, HR, purchasing, reporting, and everything else—that will just gum up the works. Instead, use ERP software and keep everything in the same place.

Industry-Specific Needs

Regular accounting software is great at managing financials, but it can’t meet industry-specific needs. You may want data masking tools or inventory tracking capabilities—these features don’t come standard with accounting software, but they do come with ERP software.

Now that you know the differences between ERP and accounting software, make sure you equip your facility with the one you actually need!