Many people are still confused about how an ERP system differs from accounting software. Because many misunderstand and compare the price of accounting software with an ERP system,

this can lead to mistakes in deciding which system to adopt — because an ERP system also has an accounting module within it.

Or many often understand accounting software to be the same as an ERP.

In this article, let’s look at the differences between an ERP system and accounting software, as information to help you choose the system most suitable for your own organisation.

First, let’s understand both programs

Accounting software (Accounting Systems)

Accounting software is an off-the-shelf program developed specifically to handle the accounting system within an organisation — for example, used to produce all accounting-related reports, prepare quotations, prepare tax invoices, or produce various tax filings.

But it won’t cover other functions, such as the warehouse and the production system, and it can’t link across every department. So accounting software is suitable for businesses without much data, or small businesses that only do general accounting.

ERP (ERP = Enterprise Resource Planning)

ERP stands for Enterprise Resource Planning, which translated literally is managing an organisation’s resources for maximum efficiency. This is not just about accounting or costs, but means the entire overall picture of the organisation — from sales, warehouse, purchasing, accounts receivable, accounts payable, general ledger,

through to the production process — where every unit can link and access data, and all reports can be pulled in real time, letting executives analyse the business much more efficiently.

What are the 4 differences between accounting software and an ERP system?

1. Price

Between an ERP system and accounting software, of course the ERP system is naturally more expensive, due to the difference in program size. Because an ERP system has a starting price from around 100,000 up to 10,000,000, depending on the provider.

This price is calculated from all the costs — whether the licence fee, the implementation fee, and the server setup fee — not yet including the annual service contract fee.

As for accounting software, it ranges from the thousands up to the tens of thousands, which may be a monthly or annual contract, and also depends on the provider as to how they base their charges.

2. Program size

From the price information above, it’s understandable that an ERP system is larger in size than accounting software, because accounting software can only do the accounting portion.

But an ERP system can cover work across the entire organisation, and has things called modules sub-divided for each unit — such as a sales module, warehouse module, production module, and so on.

Normally there may be at least 6 or more modules to cover work across the whole organisation, whereas accounting software may be equivalent in size to just 1 module of an ERP system.

3. Implementation time

As for the implementation time of the two programs, an ERP system takes longer to implement than accounting software, and the duration depends on the context of each organisation.

Some organisations can go live within 1 year; some take just 6 months. The main reason it takes long is the complexity of the system, which requires gathering requirements and training to use the system.

Every step depends on the implementer’s expertise, the users’ data preparation, and the ability to learn the system. As for accounting software, it’s a specialised system without any complexity, which can be learned from the manual provided,

or studying it yourself is not too difficult, which makes the implementation time shorter than an ERP system.

4. Complexity of the program itself

Because both programs are off-the-shelf systems but with differing complexity — that is, accounting software can’t adjust anything because the system is fairly small with no complexity,

made specifically for accountants to use. But an ERP system is more special than that. Besides being larger, it usually has greater complexity, from setting user permissions

to using functions that link all the data together — so that, for example, sales work can link data to the warehouse and production, and if stock is insufficient it links to the purchasing side to order in raw materials.

And accounting is the last unit the system sends data to in order to close the books, which makes fraud difficult, as well as falsifying accounts, because an ERP system can trace back all the data.

Summary

From the above, of course an ERP system and accounting software have clearly differing pros and cons, but the main purpose of both programs is

to make work and managing the organisation more efficient. And the program that is highly effective at managing an organisation well can’t escape being the ERP system — even though it’s more expensive, on concept alone it wins outright.

But if you’re constrained by budget and the organisation isn’t very complex, accounting software is still a good choice. But all in all, it depends on the satisfaction of the operator in choosing the program to use within the organisation.

From the article above, we hope it’s useful for those looking for a program, or who want to change their system from accounting software to an ERP system.

PlanetOne ERP counts as a good choice because it’s a Thai system, and it’s also a large program supporting work at every size of organisation.