All businesses, large or small, rely on some type of accounting solution or system to run their business. However, what exactly is meant by “accounting software” can vary depending on the context.
Gartner defines accounting software as, “a computer program that enables electronic and, often, automated recording, tracking, and reporting of an organization’s financial transactions and accounts,” but this is not the only acceptable definition.
Strictly speaking, accounting software represents the core accounting capabilities that keep the business running.
Capabilities would minimally include:
Larger enterprise systems will typically include a core accounting software module that covers these same functions plus additional features or modules to automate Revenue Recognition, Reporting, Consolidations or Fixed Assets.
Alternatively, others may think of full financial packages when they hear the term “accounting software.” Financials tend to convey a more complex need, encompassing the auxiliary financial applications that supply deeper functionality than basic core accounting.
This definition could include:
Whether you are in the market for core accounting software or a more robust suite of financial applications, the key benefits you are looking for may include:
These are just a few of the universal benefits of adding an accounting solution to your technology stack. There are many more specific benefits as you engage with specialized accounting and financial apps.
Accounting software and ERP are related to each other but are not interchangeable terms. At a high-level, accounting software focuses solely on the financial aspects of a business while ERP is a suite of applications connecting multiple departments and operational oversight. In other words, accounting software would be an important component within the larger ERP system. Some companies only use the Accounting functions with an ERP, however.
One of the main benefits of ERP systems is that they can provide a centralized view across financials, human resources, manufacturing, distribution, and more. Accounting software alone, on the other hand, can only provide insights into the bookkeeping functions of the business.
Your decision-making capacity is also limited to just financials data . With an ERP, your business decision-makers can evaluate reports across multiple departments and utilize those business insights for improved decision making.
Standalone accounting software solutions have a limited ability to scale compared to ERP systems due to structures for licensing, user seats, and records. These solutions eventually hit a wall in their ability to grow with the business, which is why growing companies upgrade to something more robust.
ERP, on the other hand, is built to scale, especially with advancements made to the cloud. Previously, ERP was inaccessible to SMBs but now technology has made ERP more widely affordable. Small businesses can now start on an ERP and grow with it to become large enterprises. This same feat cannot be accomplished on accounting software alone.
Choosing to implement an ERP will be costly, regardless of the vendor or industry. Many businesses remain on small scale accounting solutions because of the lower price point. Naturally, businesses looking to cut costs and stretch their resources are attracted to the relatively inexpensive functionality. For smaller, less complicated businesses, this is wise. Without a business case for change, there is no shame in remaining on core accounting software.
Businesses comparing ERP to standalone accounting software should also consider the ease of deployment and training requirements. Accounting software can be easy to implement and immediately begin using. ERP, on the other hand, takes significant time and resources to deploy. Basic accounting software can have a relatively minimal learning curve and allows for quick training and usage while ERP usually requires more robust testing and training to get up and running.
Ultimately, businesses must carefully consider each of these factors to make the right decision for their needs.
Accounting software is a broad term that encompasses several applications businesses use every day. Beyond the general accounting software and ERP solutions discussed above, there is much more to discover in the world of accounting. And, at the end of the day, each and every one of these solutions helps businesses move away from hard-to-maintain spreadsheets and into streamlined ways of operating.
The General Ledger is the single source of truth for any organization. Accountants know how important it is to keep an accurate GL, which is why vendors have catered to their needs and developed diverse accounting software solutions. Most of the solutions listed in this guide perform tasks to ultimately create journal entries that feed into the General Ledger. With added functionality and automation around each line of the GL, businesses can benefit from a whole new level of accounting efficiency.
Accounts Payable (AP) software allows businesses to automate the process of paying business expenses, specifically through invoices. With AP software, companies can benefit from tools like Optical Character Recognition (OCR) to scan documents for data entry, instead of manually adding the information to the system. Overall, AP software streamlines and improves supplier relationships, enhances payment processing, and reduces human error while expediting the approval processes.
Accounts Receivable (AR) software improves the experience and processes around managing and collecting money owed to a business. Companies can benefit from implementing an AR solution to create and send invoices, dunning, receiving, and posting payments to customer accounts. By automating AR processes, businesses can more efficiently manage cash flow while reducing the need for manual intervention.
Billing and Invoicing software is very similar to AR software; however, Billing and Invoicing software focuses on creating invoices or bills, delivering them to customers, and initiating the process of getting paid. Companies rely on specialized billing and invoicing solutions when generating a significant number of invoices to be paid automatically or when complex tabulations are required for line items within a contract.
Online companies especially rely on billing and invoicing solutions to reduce errors or disputes thanks to the automated documentation and payment statuses. If an issue arises, the system provides a more seamless process towards resolution. Ultimately, businesses looking to increase security, improve payment processes, and ensure those transactions are accurately recorded should look at implementing a Billing and Invoicing solution.
Payment Processing software is another very specialized solution that delivers value within the accounting suite of applications. These solutions manage all aspects of electronic transactions, which are vital to successful businesses in the modern age. These transactions include credit cards, ACH, wire transfers, and more. Through payment processing, businesses can receive and post customers’ payments as well as sending payments to vendors.
Using Budgeting & Forecasting software provides for a more complete view of business’ financial data, past and present, so they can plan more strategically for the future. Such applications can range from straightforward budget and allocation management to more robust solutions featuring advanced reporting, analytics, and scenario modeling tools. The more data and intelligent tools available, the better businesses can plan for future financial situations. They can also create new forecasts during changing conditions and thereby keep their budget targets up-to-date.
Financial Reporting solutions offer the next level of organization for businesses needing to easily manage and access reports. This is especially important for accounting compliance when reports need to be produced to auditors. Financial Reporting tools access the general ledgers to generate accurate reports and meet other reporting requirements. Additionally, many companies seek out financial reporting tools for multi-company consolidation needs to report across multiple entities.
Common examples of Financial Reports are:
Financial Reporting tools also provide internal controls over the reporting process to ensure compliance with auditors. Auditors will typically ask for a comprehensive overview of financial and operational data that will then be vetted for accuracy and completeness. In the case of financial reporting, auditors will expect compliance with financial and capital market laws.
Accurately determining when to record earned revenue is crucially important to businesses that sell products or services yet to be rendered. The process of recognizing revenue can include identifying the contract, transaction price, date services are rendered, and then allocating the revenue to the appropriate accounting periods. As this can require significant time and attention when done manually and is often subject to financial reporting standards and guidelines, Revenue Recognition software tools are used to help automate the process and ensure accuracy.
Fixed Asset Management (FAM) is vital for businesses needing to track, monitor, and maintain physical assets. From an accounting perspective, FAM solutions enable businesses to accurately account for asset value over time and record that value in their financial reports. Aside from accounting for value, FAM solutions calculate depreciation and assist in scheduling necessary maintenance for those assets.
Lease Management software streamlines the complicated processes faced by companies who need lease agreement, equipment, and asset management. Additionally, lease management software centralizes data and operations to assist in compliance with complicated accounting standards, including when and how much can be expensed. Businesses can track the innerworkings of leases, from start dates to monthly payment calculations to renewal deadlines, enabling them to comply with local, national, or even global requirements. Imagine trying to keep track of all that in a pile of spreadsheets!
Payroll Management systems streamline calculating employee wages, earnings and tax deductions while creating checks and/or direct deposits for each employee. Some businesses choose to implement internal solutions. Many businesses outsource payroll to companies like ADP who send tax payments and filings on the employer’s behalf for each employee’s state, local and federal tax authority. For companies who employ staff across multiple states, having a payroll service can be a lifesaver for keeping up with unemployment insurance, state income tax, federal tax, and even local tax filings.
Tax Management encompasses more than just sales tax, it helps businesses with international requirements to manage global taxes while remaining compliant. With a slew of global laws to keep up with, tax management software can simplify the process and save businesses time, money, and potential compliance headaches.
Treasury Management offers businesses the full overview and management of financial operations. Automated capabilities within these software solutions help maintain cash flow, assets and investments, banking relationships, and more.
This is just an overview of the many accounting solutions which are available to automate various portions of a business. Businesses in the market for a new accounting solution can rest easy knowing that whatever financial process or issue you are trying to address, there is likely an application out there to meet your unique needs.
The accounting software market has a lot to offer small businesses. Beyond the common household names, there are several other options for organizations wanting to automate their financial operations. Here are some of the best accounting solutions for small businesses.
QuickBooks is one of the most recognizable names in accounting software, delivering strong financial capabilities to small and some midsized businesses. QuickBooks Online offers a clear starting point for growing businesses through a wide range of capabilities and cloud deployment.
Small businesses tend to start with “Simple Start” to receive:
From there, customers can grow with other versions, including the Essentials, Plus, or Advanced Plans that add inventory tools, time tracking, greater analytics, and more.
QuickBooks’ scalability and flexibility are ideal for SMBs who need solutions that can evolve as their businesses do. QuickBooks offers a much more robust feature set than other small business accounting solutions, helping it stand out among the competition.
Xero is another major player in the accounting space among small businesses. The cloud-based solution is extremely user-friendly and offers the tools small businesses need to succeed.
Core Xero functionality includes:
Additionally, Xero offers a market of integrated solutions customers can use to grow. Customers can:
Xero, like most other small business accounting solutions, can fit comfortably in a number of industries and is a great starting point for growing businesses. Xero’s ease of use uniquely positions it among its competition.
FreshBooks is unique in that it primarily targets the smaller side of the market. It caters to the truly small businesses, “solopreneurs”, freelancers, and contractor-reliant businesses. Depending on your “category,” you can implement a solution that works for your needs. More generically, FreshBooks offers:
Within FreshBooks’s specific accounting software solution, customers can perform key financial processes, including invoicing, billing, and financial reporting. FreshBooks’s competitive edge comes from its narrow focus on the small businesses it serves. Specialization has allowed FreshBooks to truly deliver in these spaces.
Accounting Seed is a smaller accounting solution built on the Salesforce platform. Like other solutions on this list, Accounting Seed offers a clear path for growth once you are on the solution. From the start, customers can expect the “five core accounting functions”:
As the business grows, customers can implement tools to further automate accounting, deliver stellar financial reporting and analysis, and expand how they do business. In addition to core accounting functionality, Accounting Seed offers:
Beyond the product itself, customers choose Accounting Seed for the Salesforce platform. Through this connection, they can access a vast market of solutions available on the Salesforce AppExchange or benefit from Salesforce Connectors to implement any Salesforce Cloud application.
As an organization graduates from small to midsized, it opens a whole new world of more robust accounting solutions with greater automation capabilities for forecasting, reporting, analytics, financial controls, high-volume invoicing, and more.
While we are focusing on financial solutions here, it should be noted that the vendors listed provide ERP systems that include modules for various aspects of business operations in addition to the financial capabilities.
Acumatica is an ERP solution offering an array of products based on functionality and industry. Acumatica’s Financial Management Solution, also offered as the General Business Edition, delivers the core financial capabilities needed for a midsized business to shine.
The solution boasts general capabilities, from the General Ledger, Accounts Receivable, and Tax Management to Time Management and Payroll Management. From there, businesses with more complex requirements can choose from a number of modules, including
Each module delivers the next level of operational capabilities a company may need at each step of its journey. Acumatica’s core accounting functionality is available within each of Acumatica’s industry editions, offering specialized solutions for Construction, Distribution, Manufacturing, Professional Services, Retail, and Field Service.
Acumatica stands out from the competition when it comes to midsized businesses experiencing significant growth. Their unique pricing plan makes it easy to start small and then grow with you.
The cloud platform is also configurable and customizable, further supported by a vast partner ecosystem. Acumatica only sells through partners, putting significant power in the hands of Value-Added Resellers (VARs) to innovate. Each VAR has been able to develop a deep specialization. Instead of competing with a direct sales team within Acumatica, they can focus on creating within their industry or niche.
Epicor has a wide variety of financial solutions to meet the needs of clients through secure and flexible applications. Epicor Financials Core is the foundation for Epicor’s accounting solutions, providing the fundamental capabilities companies need to succeed.
Basic functionality covers what you would expect, from the General Ledger to Financial Accounting, but Epicor has also developed capabilities you can “turn on” as your business grows. Early tools include:
From there, businesses can seek add-ons such as Asset Management, Collection Automation, Digital Commerce, Global Business Management, Project Management, Multi-Site Management, and much more. Epicor has also developed its own unique industry focuses and thus developed specialized tools for Automotive, Building Supply, Distribution, Manufacturing, and Retail.
Epicor offers a less diverse catalog of industry solutions; however, the specialization has enabled greater innovation within its areas of expertise. Manufacturers and Distributors know they will find what they need in Epicor’s suite of applications. With advanced functionality for Materials Resource Planning (MRP), alongside feature enhancements through AI, especially in the world of e-commerce, companies have the freedom to expand with capabilities already embedded within the existing platform.
Infor Core Financials offer customers end-to-end financial and accounting capabilities. The solution delivers foundational accounting functionality, from the General Ledger to Accounts Payable and Financial Reporting, all on Infor’s integrated platform. Infor’s technology platform makes it easy for customers to implement new solutions, especially when it comes to meeting industry-specific needs.
As companies grow, they can explore Infor’s suite of applications to do more on the platform they are already utilizing. Infor’s unique value comes from its specialization in the Distribution, Manufacturing, and Service industries. In fact, Infor has developed many micro-vertical solutions to meet more robust needs in those spaces.
Distribution
Manufacturing
Service
By developing industry-specific solutions on the same platform, customers can utilize the core financial capabilities while improving functionality and avoiding the need to develop complicated integrations.
Infor tends to play in the same industries as Epicor, so many capabilities and modules may overlap. Infor, however, has an even more niche focus on manufacturing. Infor offers an array of solutions to meet micro-vertical needs as well as solutions to deliver for mixed-mode production models. Manufacturers can create various products within the same facility, without the obstacles commonly associated with this production time, including lag time for line stops or changes.
Microsoft’s financial solutions lie in Dynamics 365. The core financial solution is Microsoft Dynamics 365 Finance. Like every other mid-sized vendor on this list, Microsoft Dynamics offers customers the core accounting capabilities needed to run their businesses.
Beyond basic functionality, Microsoft has developed a way for executives to uniquely develop their financial models to meet evolving business needs at a pace that makes sense for them. Additional Dynamics 365 Finance features include:
Recent innovations through Copilot, Microsoft’s AI solution, have enhanced all Microsoft solutions with robust AI capabilities. Copilot will continue to transform the way customers interact with Dynamics 365.
Within the Microsoft Dynamics suite, customers benefit from the larger ecosystem at play, including access to Azure and the familiarity of Microsoft Office. Microsoft tends to rank high among administrative staff who enjoy the user interface and operational functionality offered.
NetSuite’s Cloud Accounting Software simplifies financial operations through basic accounting capabilities, including accounts payable and receivable, financial close, and the general ledger – all benefitting from embedded AI.
NetSuite heavily benefits from its parent company, Oracle. The platform is built on Oracle Cloud Infrastructure (OCI), providing a unique value add for customers to benefit from the tech giant’s innovative technology platform. NetSuite Cloud Accounting Software offers basic functionality, including the general ledger, cash management, accounts payable, and accounts receivable. As businesses grow, they can benefit from additional capabilities from Account Reconciliation and Close Management to Fixed Assets Management and Payment Management, as well as integrate with an array of Oracle solutions, such as Enterprise Performance Management.
NetSuite also offers specialized functionality for businesses across various industries, such as:
NetSuite is a highly regarded financial application with a reputation as being “designed by accountants for accountants.” Many companies turn to NetSuite for multi-currency transactions and international operations. NetSuite’s hold on the market strengthened with its acquisition by Oracle, which uplifted the system with Oracle Cloud Infrastructure (OCI) and furthered NetSuite’s global expansion. The product will continue to innovate and deliver more to its customers, making it an extremely appealing option on the market.
Sage Intacct Core Accounting highlights important core accounting capabilities while enhancing experiences with the power of AI. Sage Intacct’s financial reporting tools provide deep insights into the business, with strong dashboards and reporting alongside “dimensions” to present data more comprehensively, without costly data analysts. Sage has also empowered the General Ledger with Sage AI and multi-entity insights, creating a more user-friendly way to transform financial processes. Growing companies can also benefit from the Sage Intacct accounting solution through other essential capabilities, including Cash Management, Order Management, Purchasing, and more.
Companies that need a little extra implement Sage Intacct’s advanced accounting software modules. Solutions within the advanced management tool offer customers global capabilities, including multi-entity and global consolidations, alongside more specialized solutions: allocations, fixed assets management, inventory management, and lease accounting. Recently, Sage took it a step further by developing Manufacturing & Distribution Operations for Sage Intacct. This move further supports Sage Intacct’s go-forward strategy and solidifies a clear path forward for the product and its customers. Overall, Sage Intacct offers very strong core financials.
Enterprises tend to be much more complex than SMBs. When you think of international business giants like Coca-Cola or Nestle, you can probably imagine just how complicated their operations can get. As a result, many need the capabilities offered by these ERP behemoths.
IFS offers Enterprise Financial Management within its ERP solution to empower large enterprises. By providing a unified platform for financial control, businesses can use data to drive decision-making and maintain greater control over their entire business. Companies receive all core accounting functionality, including the general ledger, accounts payable and receivable, and financial reporting.
The cloud is another key strategy for IFS. Customers can benefit from IFS’s cloud platform, especially enterprises, who will continuously need more functionality to fuel their growth. IFS focuses heavily on the Energy, Utilities, & Resources, Construction & Engineering, Service, and Manufacturing industries. Each solution delivers enhanced financial capabilities for specialized industry needs.
Many companies enjoy the array of solutions available beyond the ERP. Companies with a significant number of assets to track and account for turn to IFS’s Enterprise Asset Management. Others who work in the field, servicing clients and equipment, will add Field Service Management to their technology stack.
Oracle offers its accounting solution bundled with financial management so enterprises can manage the entire process from start to finish. Enterprise vendors offer solutions this way strategically because businesses utilizing these types of solutions will need all those capabilities immediately upon implementing the solution.
At its core, Fusion Cloud Financials offer all essential accounting functions a large enterprise would need. Oracle offers an “enterprise-wide” accounting platform, unifying the entire dataset into a centralized place, Oracle’s “Accounting Hub.” Essential accounting functions, including the general ledger, accounts payable, accounts receivable, and cash management, are all managed in Fusion Cloud Financials. Enterprises can also benefit from asset and lease management for complex asset tracking, all meeting regulatory tax requirements. From a holistic view, all functionality compiles to improve financial reporting and ensure full compliance, alongside tools to track ESG.
Within accounting and control, companies can automate their financial processes and close the books faster. Using Artificial Intelligence and Machine Learning, users can effectively identify anomalies and act based on analytics. Companies can also manage multi-currencies, languages, and accounting standards with out-of-the-box capabilities, along with integrated planning and budgeting.
SAP’s financial management portfolio is vast. The full product provides an end-to-end approach with capabilities for central finance, financial close, group reporting, account substantiation, and intercompany management. Intelligent automation, empowered with advanced AI and machine learning tools, elevate enterprises to remove traditionally manual tasks.
Customers benefit heavily from being a part of the SAP ecosystem because of the access to native SAP solutions, resulting in greater visibility across the entire organization. With access to all organizational data, customers can more effectively evaluate their financial situation and act within their accounting solutions. SAP’s accounting system is offered more as a full financial management way of approaching the process.
SAP S/4HANA for central finance offers a different approach to accounting software adoption through “adaptable rollout” so customers can phase the solution’s rollout. This may be an ideal approach for large enterprises looking to get deeper functionality at their own pace.
These summaries merely scratch the surface of what the accounting solutions have to offer, so make sure to do your research and reach out to ERP Advisors Group if you need any help!
Our job at ERP Advisors Group is to help you select a system that works for your company and meets the needs of your stakeholders.
If you need help selecting the right accounting solution, let us know. We love helping companies select the right platforms as much as we enjoy helping them prepare for successful ERP implementation. Contact us at 866-499-8550 or info@erpadvisorsgroup.com.
