Difference Between ERP Software And Accounting Software

|Updated on: February 1, 2022

ERP software and accounting software are two types of business management software tools that are critical for a business to run smoothly. While the two software tools differ in functions and features, they both have a vital role to play in every business regardless of the industry and size. It has long been a myth that only enterprise-level businesses need ERP and accounting solutions. With the complexities involved in running a business successfully, it is imperative that businesses are aware of the software solutions available to them that can help make business management easier. Let’s explore precisely how ERP software and accounting software differ from each other.

What is ERP software?

Enterprise Resource Planning or ERP software is a software package used to manage the everyday activities of a business in an integrated fashion. ERP enables all the business processes to be connected so they can be managed well, thereby allowing effective business management. For example, an organization has a number of different departments. ERP software helps to connect all these systems, even if they are running on different software and provides key insights to business owners so the business can be run efficiently. ERP is not just a standalone software solution but consists of numerous modules that work together and allow for information to be passed onto a central database from which decisions can be made. A robust ERP solution allows for integrations with a plethora of tools and other software, for this very reason.

What is accounting software?

Accounting software helps store, report, and analyze business financial data. Whether it is a hundred transactions or thousands of transactions, accounting software makes it easy to record and derive useful information from that data due to its automation capability. It makes accounting faster, easier, and efficient as it eliminates manual errors. As no physical space is required for recording all transactions and financial information, it helps cut business costs, reduces errors, and saves considerable time as all the data is in one place. Accounting software allows quick financial information to be pulled out when needed and enables you to make smart financial decisions through thorough reports.

Best Accounting Software for Businesses

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ERP software vs. accounting software

ERP Software

Accounting Software


ERP software 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.

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.

    Difference Between ERP Software & Accounting Software

  • 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


Read more on ERP and accounting software

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