Difference Between ERP Software And Accounting Software


Difference Between ERP Software And Accounting Software


No matter the industry or size of the business, the two software tools such as accounting software and ERP, despite having different functions and features, are equally important. It’s a persistent misconception that ERP and accounting software are only required by businesses on an enterprise level.



Businesses must be aware of the software options available to them that could indeed contribute to making business management simpler, given the challenges involved in operating a successful business. Let’s examine the precise distinctions between ERP and accounting software.



Real-time data and mobility are only partially provided by accounting software. All financial data is integrated by ERP into a single database. ERP systems do away with the necessity of using several tools to handle the needs of various departments by offering an integrated solution for a variety of business activities.


What Does “ERP” Stand For?

A software programme called Enterprise Resource Planning (ERP) is used to combine the daily operations of a corporation. ERP makes it possible for all corporate processes to be connected and controlled properly, enabling efficient business administration. A company, for instance, has a variety of departments. Even if they use different operating systems, these systems can be connected with the aid of ERP software, which also gives business owners crucial information for running their operations effectively.

ERP is a collection of interconnected software modules that enable data to be transferred into a centralized database from which choices can be made. It is not merely a single software solution. For precisely this reason, a strong ERP solution enables integrations with a wide range of devices and other programmes.

Accounting Software – What Is It?

Accounting software assists in storing, reporting, and analysing financial data for businesses. Accounting software’s automated capabilities makes it simple to collect and extract meaningful information from data, whether there are a hundred or a thousand transactions. As manual errors are removed, accounting is accelerated, simplified, and made more effective.

All transactions and financial data may be kept in one location without taking up physical space, which lowers business expenses, decreases errors, and saves a significant amount of time. Through extensive reports and the ability to quickly access financial data as needed, accounting software helps you manage your money well.

Accounting Software

The difference between ERP and accounting software is that accounting software generally only provides functionality for accounting (hence the name). This can include areas such as:

  • Accounts Receivable
  • Accounts Payable
  • Bank Management
  • Financial Reporting
  • Basic Revenue/Sales Recording and Tracking

Accounting software is designed to manage only one specific area of a business, but it does this very well. As a small business, accounting software is often the first software system implemented in a business, while other operational requirements such as inventory management and customer service tasks are tracked manually using pen and paper or spreadsheets.

ERP Software

ERP software on the other hand, will always include the same functionality as accounting software, plus other tools for managing the entire supply chain and logistical requirements, such as:

  • Inventory Tracking
  • Warehouse Management
  • Customer Relationship Management
  • eCommerce
  • Barcode Scanning
  • and more

ERP is a fully integrated and comprehensive, end-to-end solution that covers all (or almost all) facets of the business. Many businesses start out with basic accounting functionality when the company is young and order volume is low.  However, as your business grows and the need for additional functionality arises, it will come time to start looking at an ERP solution. Robust ERP software will also include industry-specific functionality that is more advanced. For example, features such as lot tracking, landed cost tracking, service and repair functionality, and document management.


Best Accounting software for Business

TallyPrime Features

ERP Software Vs. Accounting Software

ERP Software

Accounting Software


ERP is an all-encompassing software package that consists of modules that integrate with the different aspects of a business. Accounting is a part of what ERP offers. ERP includes various other modules such as operations, CRM, procurement, manufacturing, production, and so on. An ERP is generally offered as a customized solution that integrates systems based on the business.

Accounting software is a standalone software package that focuses on just the accounting aspects of a business solely. It has comprehensive features that deal with the financial part of any business only. While it is required to manage the financial part of the business, it does not integrate with the other processes of the business in the way that an ERP usually does.


As ERP software is extensive, it costs more when compared to an accounting software package. While this can vary depending on the modules involved and the size of the business, ERP software requires a longer time to be set up. Due to this, it may take longer for employees to understand the true capabilities of the software and how it can benefit them, although today such tools have become easier to comprehend.

Accounting software is provided as a whole package that enables businesses in any industry to manage their accounts and all the nitty-gritty details of their finances. It gives a microscopic view of all the transactions whenever needed and all the details pertaining to those transactions. Accounting software can automate all accounting tasks and is cheaper than an ERP solution.

Business functions

ERP software provides valuable insights into the overall performance of a business rather than a single aspect. For example, ERP software doesn’t only tell you about how efficiently the supply chain operations are taking place. It speaks of where problems occur in the entire business and where processes are taking place smoothly. ERP software is larger in scope and provides an in-depth view.

Accounting software gives detailed information about the financial health of the business. While this is important, it is not as comprehensive as an ERP. Accounting software can help you understand your current business position in terms of profits and losses. It helps you thoroughly understand whether your business is doing well financially or not.


ERP software enhances collaboration between employees in various departments because it is used by all the employees to share information across departments. This can help increase transparency across departments and thereby inculcate a culture of trust in the business. The user adoption rate is likely to be higher because everyone is working on the same foundation.

Accounting software helps improve collaboration between people who are in charge of the financial aspect of the business and the stakeholders. Accounting software can help stakeholders get a view of the entire financial health of the business and this can help them make changes that can help cut costs and improve business revenue.


Is One Better Than The Other?

This depends on your business size, requirements, and your goals. If you are a small or medium-sized business, plugging in accounting software can get you to your business goals. Larger companies, on the other hand, need dedicated ERP systems to manage their business processes. Both software solutions have benefits that can be advantageous to a business in different ways. They both offer automation and allow for real-time reporting so you can do what is best for your business.

Most small businesses tend not to opt for ERP software because they think they won’t utilize the software to its full potential. Contrary to popular belief, ERP software is not an impossible software tool to understand provided you choose the right one according to your needs and what you want to achieve.

Can An ERP Be Used As An Accounting?

An ERP system ensures that your accounting is automated. It simplifies operations related to accounts receivable, accounts payable, improves cash flow problems, and cash management. It becomes pretty easier to manage the entire organization by generating information and compiling it.

Now Small Businesses Can ERP!

TallyPrime offers you the best of both worlds, which is why it is called ERP accounting software.

  • It is a complete business management software solution that provides the features of ERP software and accounting software all rolled into one comprehensive software solution. TallyPrime is the answer to effective business management.

  • Whether you want to generate invoices or you want to generate specific reports that help you make big risky decisions, TallyPrime takes the complexity and confusion out of business management.

  • If you’re a small or medium-sized business, TallyPrime can be your go-to tool for both your ERP and accounting needs, without burning a hole in your pocket! You can get the best combo of functionality and cost savings with a single business management tool