Accounting software have long been considered a necessity for helping startups and small businesses like yours automate their financial operations.
With the advent of products like QuickBooks Online and Xero, accounting software have also made the transition to the cloud.
This has made accounting software even easier to use than before, with end users able to access these solutions anywhere, anytime to manage their business financials.
However, despite the improvements that moving to the cloud has brought, accounting software still falls shorts in various respects compared to ERP software, especially cloud ERP like Oracle Netsuite.
Therefore, if your business is reliant on a cloud accounting software like QuickBooks or Xero, there will come a point when it’ll grow beyond the capability of these solutions to handle.
That will be the point where you should consider replacing your cloud accounting software, with a cloud ERP software.
Let’s take a look at what accounting software and ERP software bring to the table respectively.
What Does Accounting Software Offer?
Accounting software generally offers a set of basic accounting features, which includes but are not limited to the following:
- Accounts receivable and payable (AR/AP)
- General ledger (G/L)
- Sales and purchase orders (PO)
- Bank management
It can also collect and process key financial data in your business to generate the following financial reports:
- Balance sheets
- Income statements
- Statements of cash flow
- Profit and loss statements
Because these features and functionalities are sufficient to meet their relatively simple financial management needs, accounting software are usually one of the first software solutions to be implemented in startups and small businesses like yours.
How Does ERP Software Differ From Accounting Software?
Examples of ERP functionalities & Features
While ERP software comes with the same set of financial management features as accounting software, it also offers so much more than the latter.
That’s because ERP software fully integrates financial management functionalities with other critical processes throughout your business, such as:
- Inventory tracking
- Warehouse management
- Supply chain management (SCM)
- Customer relationship management (CRM)
Because of this integration, cloud ERP software can unify critical business data across your organisation, and provide a single source of truth into your business in real-time.
This is not possible for accounting software, even cloud-based ones like QuickBook and Xero, as they do not connect and integrate with software solutions in other parts of your business, like cloud ERP software does.
The real-time visibility that cloud ERP software brings to the table gives it several key advantages over cloud accounting software. Let’s look at what these advantages are.
Advantages That Cloud ERP Software Have Over Cloud Accounting Software
1. Real-time Financial Reporting
Although QuickBooks and Xero have brought accounting software to the cloud, it doesn’t change the fact that such solutions were designed for a time when financial reports were generated at the end of the month.
Because of this, cloud accounting software are not designed to integrate with other software systems in your business, which means your financial data are trapped in silos.
This means cloud accounting software cannot provide real-time visibility into the financial state of your business, and are also incapable of handling more complex financial processes which require real-time responsiveness, such as financial controls and recurring billing and invoicing.
On the other hand, a cloud ERP software like NetSuite is capable of all of the above. This means it can provide accurate, up-to-the-information on your cash flows and other financial information, allowing you to make immediate business decisions in response.
2. Automated Data Reconciliation
When your startup or small business is in its early days, the scale of your operations is small enough to rely on the basic feature set of cloud accounting software.
But as your business grew, you probably implemented other software systems designed to automate and manage other functions in your business, as the need for them became clearer.
However, because these systems are not integrated with your accounting software, it will eventually result in a ‘hairball’ of business software systems that do not communicate with or share data with each other.
This means data has to be transferred manually between your systems, which can result in data entry errors, slow down your financial reconciliation process, and force you to carry out forecasting and budgeting on best guesses rather than solid data.
A cloud ERP software resolves this issue with its ability to integrate all the other software systems you’re using to manage the other parts of your business.
This automates data reconciliation between your software systems, eliminating all user errors and greatly speeding up the process, as well as ensuring that you’ll get the accurate and up-to-date data you need for your forecasts and budgets.
3. Customising For Industry-Specific Needs
As your business grows, it’ll reach a point where the business challenges it encounters are specific to the industry it’s operating in.
Because of that, your business will also need solutions that can be customised to tackle the industry-specific business needs it will be facing.
However, cloud accounting software are usually not easily adapted to the unique needs of your growing business.
For example, hotels can face accounting challenges that are specific to the hospitality industry, which requires customisations that cannot be done with a basic accounting software.
However, a cloud ERP software like Oracle NetSuite can been customised accordingly to best fit the needs of said hotel, allowing them to resolve the industry-specific financial management challenges that are hindering their productivity and profitability.
It's Time To Make The Switch From Accounting Software To ERP On The Cloud
Although both accounting software and ERP software are now available on the cloud, that does not mean one is as good as the other.
Despite being cloud-hosted platforms, the likes of QuickBooks and Xero still retain the natural limitations of the accounting software of years past.
Because of these limitations, your business needs will still grow past their capacity to handle at a certain point in the growth of your startup or small business.
When this happens, it’s time to consider shifting to a cloud ERP software like Oracle NetSuite, which combines the financial management features of cloud accounting software with other important business functions.
With a cloud ERP software, you’ll get the real-time visibility and automation that cloud accounting software could never deliver.
So, if your business is reliant on a cloud accounting software like QuickBooks, is it time to trade it in for a cloud ERP software? Click on the image below to find out if this is indeed the case.