ERP, or Enterprise Resource Planning

Accounting Software Grows Up

In the “old” days, we called the software that businesses used to manage their operations, “accounting software” or “accounting systems.” These systems provided basic accounting (General Ledger, Accounts Payable, Payroll and Accounts Receivable). We referred to these “modules” as GLAPPAR (rhymes with flapper). Not much has changed since the 1980s in basic accounting software. That’s not surprising since not much has changed in basic bookkeeping since the 19th century. [Note to CPAs: I did not say “not much has changed in accounting.”]

Rise of Enterprise Resource Planning (ERP)

As software matured and businesses became more sophisticated, international, and dispersed, there was a need for a “real time” record of the business transactions. Even more important, the resources of the business like personnel, inventory, assets, and manufacturing plants needed to be allocated effectively. Enter ERP.

What is ERP software?

ERP software typically does everything accounting software does, plus provides support for all the other areas of business operations such as manufacturing scheduling, inventory purchases, personnel scheduling, supply chain management, shipping, warehousing, etc. All of this is done by most ERP systems in real time. Post an order in Taipei; the head office in Shanghai knows about it in a flash; and the plant in Mexico begins producing the product the next day.

Business Benefits of integrated accounting software

Integration of the accounting and business operations software in this way allows data to flow to the far corners of the enterprise where it is needed. By collecting data on real time business operations and redesigning processes such as shipping, warehousing, marketing and planning, the enterprise also accomplishes the following:

  • Increased selling time
  • More efficiency in logistics resulting in lower costs and personnel requirements
  • Reduced shipping rates
  • Better supplier communication
  • Inventory reduction
  • Control over all aspects of the business operation
  • Fewer inventory stockouts
  • Better manufacturing efficiencies
  • …and more.

Is ERP right for you?

To answer this question, more information about your specific business operation, current systems, and business processes is needed. For more information on how this information can help you generate business growth, see the DGG STATICS process.