Do you know when you should upgrade from off-the-shelf accounting software to ERP accounting software?
Many small businesses use accounting software to handle their daily accounting tasks. However, there may come a time when a company outgrows its software. The following three factors indicate that it is time to upgrade to ERP accounting software if you currently use QuickBooks, Freshbooks, or another accounting package.
But first, what’s the difference between ERP accounting software and off-the-shelf software?
ERP Accounting Software vs. Traditional Accounting Software
The primary function of traditional accounting software is to record and track a business’s daily cash inflows and outflows.
ERP software, or enterprise resource planning software, does so much more. There is a difference between ERP and accounting software, but the terms are often used interchangeably.
A company’s ERP system integrates multiple data streams into one. Many processes are automated, including transferring data between different departments into the accounting system. Along with basic daily accounting and complex financial reporting, ERP systems may incorporate CRM, warehouse, and HR data. A company will benefit from a comprehensive, big-picture view of its needs, depending on the system chosen and its setup.
3 Signs It’s Time to Upgrade to ERP Accounting Software
You are the only one who knows when it is exactly the right time to upgrade your accounting software to ERP. You should, however, watch out for three things that are usually signs that it’s time to upgrade.
1. You’re constantly searching for data.
In your search for that scrap of data from a spreadsheet you remember seeing in a past meeting, you must call, email, or text various people in many departments. You might not even know if your company tracks a specific metric, but you hope it does.
Accounting programs only track cash in and out—they don’t track other data types. A comprehensive ERP system puts data from every department at your fingertips. With data accessed according to permission settings, users save time by not asking where data was last seen. Accounting programs cannot provide this type of transparency.
2. You need a separate system for inventory tracking.
Accounting programs can collect inventory values on the balance sheet but cannot track the inventory itself. For businesses with substantial inventory, spreadsheets or separate inventory management systems are needed.
This limitation may severely hamper growth. Today’s consumers expect “the Amazon treatment” even in B2B transactions, so an e-commerce portal must have a digital inventory system. Customers need to know whether an item is in stock, when it will ship, and how they can track it once it has been shipped. An ERP and e-commerce platform connected to a digital warehouse management program allows your company to provide those services, giving it a competitive edge.
3. Your accounting program doesn’t integrate with other programs.
Some accounting programs can integrate with other programs on a limited basis, but they cannot integrate with specialized platforms for manufacturing and distribution, for example. ERP systems are different from other systems. Flexibility is built into these systems, often through apps and open APIs that enable other companies to build automation and functionality connectors that enhance the basic system.
Do You See the Signs?
When you feel your business is ready to switch to ERP accounting software, spending some time researching the many options is a good idea. After reviewing various platforms, establish a list of requirements, and then contact us when you are ready to discuss your objectives, business goals, and needs.