ERP Software vs Accounting Software: Key Differences Explained

|Updated on: May 14, 2024

Business management software tools such as ERP software and accounting software are essential for the smooth operation of any business. Although these tools have distinct functions and features, both play crucial roles regardless of a business's industry or size.

Previously, it was believed that only large enterprises required ERP and accounting solutions. However, given the complexities involved in running a successful business, all businesses must be aware of available software solutions that can simplify business management.

Let's delve into the specific differences between ERP software and accounting software.

What is ERP software?

Enterprise Resource Planning (ERP) software is a comprehensive software package designed to integrate and manage various business activities seamlessly. It facilitates the effective management of interconnected business processes, enabling efficient business operations.

For instance, within an organization, different departments may operate using distinct software systems. ERP software bridges these systems, ensuring connectivity and providing valuable insights to business owners. This integration is not limited to a standalone software solution; instead, ERP comprises multiple modules that collaborate to collect and centralize information in a database, enabling informed decision-making.

To accommodate diverse requirements, robust ERP software can be seamlessly integrated with a wide range of tools and software.

What is accounting software?

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 and insightful business 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.


ERP software typically carries a higher price tag compared to accounting software due to its extensive nature, varying based on modules and business size, and requires a longer setup time.

This lengthens the learning curve for employees to grasp its capabilities and benefits, although modern tools have improved user comprehension.

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 offers a holistic view of business performance beyond individual aspects, identifying issues and highlighting streamlined processes across the organization, making it larger in scope and providing comprehensive insights.

Accounting software provides detailed financial information, giving insights into the business's financial health, while ERP software offers a more comprehensive view of various business operations beyond just accounting.


ERP software promotes cross-departmental collaboration and information sharing among employees, fostering transparency and trust within the organization.

This unified platform increases user adoption rates as all employees work on a shared foundation.

Accounting software facilitates collaboration between financial personnel and stakeholders, providing a comprehensive view of the business's financial health.

This enables stakeholders to identify opportunities for cost reduction and revenue improvement, leading to informed decision-making.

ERP software or accounting software: Which is better

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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