Enterprise resource planning (ERP) accounting software is one of the most critical components of an organization’s information technology (IT) infrastructure. Thus, there are a daunting number of vendors that offer ERP accounting software for every industry niche imaginable.
This buyer’s guide will help you make sense of all these vendors and better understand their ERP accounting software platforms. This way, you can select the most appropriate platform for your company.
This buyer’s guide provides a brief overview of AMSs, including:
Many ERP suites will include a wide array of applications, which vary depending on the industry niche the system is targeting. They often include applications for customer relationship management (CRM), supply chain management, manufacturing and human resources.
Typically, an ERP accounting suite will include more than core accounting functionality, offering modules for things like inventory management, payroll and fixed asset accounting. However, some suites only come with accounting capabilities and instead offer deep integrations with other industry-standard business applications. For example, many ERP accounting systems feature seamless integration with Salesforce in lieu of offering their own CRM functionality.
Since different industries have different needs, ERP vendors typically target specific industries with their suites by including additional modules and applications. In many cases, applications are offered “a la carte” so the buyer is able to customize their ERP package to fit their needs.
(For more information about industry-specific ERP applications, check out our ERP page here.)
Below are some core functionalities that most ERP accounting systems offer. Keep in mind this is not an exhaustive list, as most suites also offer industry-specific modules and applications.
|Core accounting||Assists with standard accounting procedures including general ledger, accounts payable and accounts receivable (commonly referred to as GL, AP and AR, respectively).|
|Inventory management||Helps users track and manage physical inventory, typically in the context of a warehouse or distribution center.|
|Payroll||Assists with payments to employees and contractors, and typically integrates with payroll solutions such as ADP. Some suites will also track time, attendance and benefits administration.|
|Enterprise asset management||Assists with tracking an organization’s physical assets, such as property, computers, office equipment and other hardware. It can also help track equipment upgrades, maintenance schedules and construction timelines.|
As noted above, different industry verticals will have vastly different needs when it comes to an ERP package. Here is an overview of some of those different industries and what their needs might be:
Manufacturers. Manufacturers typically have a need for specialized applications such as manufacturing execution, materials requirements planning and quality assurance management. The larger and more complex a manufacturer’s operations are, the more robust software they’ll need.
For example, a food manufacturer that has multiple product lines will need software that can assist with batch processing and recipe and ingredient management.
Professional services. Smaller law, accounting and consulting firms typically don't need much beyond core accounting and payroll. However, larger firms may have more advanced requirements than what a basic system, such as QuickBooks, can handle.
High tech. Software development firms tend to be best served by stripped-down packages that focus heavily on accounting and CRM capabilities, since these firms have no use for manufacturing or supply chain management components. That said, some firms could have a need for an ERP suite that includes strong project management functionality, such as Netsuite or Microsoft Dynamics.
Retail. Brick-and-mortar retailers typically need an ERP accounting package that has strong inventory management functionality and can integrate with their point-of-sale platforms. Online retailers often have a need for e-commerce integrations (e.g., with Amazon or eBay) in addition to warehousing and distribution modules.
Distribution. Third-party logistics firms and other types of distributors will need strong warehouse management functionality, especially if they service more than one client or otherwise operate multiple warehouses.
ERP accounting systems can be hosted by the vendor (cloud-based) or by the user (on-premise). In general, cloud-based systems are priced differently from on-premise systems.
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