Key Considerations When Choosing and Evaluating Accounting or ERP Solutions

As your small or medium sized business experiences grow, you’ll find that you will need to add some type of resource management software to your systems. For a small business, it could be as simple as an accounting system for one to a few users, while established and mid-sized businesses can see their needs met with more complex enterprise resource planning solutions.

While a simple accounting system will get your numbers in order, an ERP solution will improve operational efficiency, which ultimately translates to systems that can support growth and lead to bottom line improvement. The question then becomes: what features are best for my accounting needs? Or, what should you look for when evaluating various ERP solutions?

What features are best for your accounting needs?

1. Business Size and Organization. When choosing accounting software, the size and organization of your business must be taken into account.  A small business will not need all the bells and whistles that a medium or large business will.  The industry your business is in affects which accounting software is best for you.  For example, if you are the only employee, you will not need a payroll feature.  If you sell a service, you may not need an inventory feature.

2. Security. It is possible that security is the most important feature that your accounting software can have.  The data contained in your accounting software is highly sensitive and confidential.  You will want to be sure to analyze security needs for your business.

3. Reporting. There are multiple laws regarding accounting reporting and it is possible that you will have to report to different agencies.  Your software should help you by making sure that you have the information needed in order to adequately report financial information.  The type of business that you have will help determine what reporting features you need to be compliant with the current regulations.

For larger businesses, ERP may be the better answer

For larger businesses with more complex processes, a more robust system can bring the best results. ERP solutions offer a standard of best practices to make businesses more efficient and better prepare to attain their objectives. The key considerations when evaluating competing ERP software alternatives include:

1. Eliminate redundancy.  One of the significant advantages to implementing ERP software is that eliminates a duplication of effort across business organizations. It also eliminates duplication of effort within some organizations when it comes to reporting information. For example, your employees might find that they are recording the hours that they spent on a project both to the accounting department and to their management. A strong ERP solution will facilitate a single reporting user interface that will store the data so that it can be used by both the management team and the accounting team.

2. Implementing Desired Change. The implementation of ERP software will necessitate a change in how people do their jobs. To continue with the previous point, employees will now be entering time using different software. With the implementation of ERP, the change is usually a sweeping, company-wide change designed to make processes more efficient. That kind of change will require some level of coaching towards those who will be affected by it, plus some support after the system has been implemented.

3. Integration. Assuming your business has multiple departments, such as purchases and inventory, your accounting software needs to be able to integrate all aspects of your business.  This integration can help your business run more efficiently and effectively, saving you time and money. It’s best if you put in place a solution that works with software that you already have. For example, an ERP solution should work with your existing email system. It should also work with whatever document management and collaboration systems you have in place.

If you’re interested in learning more about ERP solutions, feel free to contact us. We’ll be happy to analyze your current situation and suggest a plan in line with your budget.