When looking for a solution to transform your finance function the question that often arises is “do I need an accounting package or an ERP (Enterprise Resource Planning) solution?” Traditionally the first port of call would have been to select accounting software but now most organisations are choosing ERP and we wanted to discuss why.

In reality accounting software and ERP systems have a lot in common, which is driving the confusion between the two. Plus, most ERP’s, including the Microsoft Dynamics range, originated from finance software or accounting and bookkeeping solutions that over time extended their operational capability. See what version of dynamics is for me blog.

Accounting software

Accounting software will generally offer a wide range of financial capabilities including; accounts receivable, accounts payable, trial balances. Many solutions also offer more advanced features such as Time & Expenses, sales ordering and billing, basic procurement. Like most software solutions there is a wide range available offering different capability and a range of delivery options including on-premise, hybrid and cloud options.


An ERP system is about managing all of the various resources a business has. This includes financial resources (procurement, billing, customer and supplier management), operational resources (Inventory management, machinery, production processes and rental fleets) and employee resource (time and attendance management, skills mapping and resource allocation). So an ERP system can bring a lot more to an organisation than accounting software, especially those with complex operations that want to drive efficiencies across their business. It can provide a greater level of reporting and end to end integration for all business transactions.

When looking at a solution like Microsoft Dynamics this capability includes additional functionality such as production planning, warehousing and inventory, employee/project resource allocation and supply chain management. The accounting and finance capability generally encompasses everything you would find in an accounting software and more. Microsoft offer two ERP solutions, Dynamics 365 for Finance and Operations and Dynamics 365 Business Central. Dynamics 365 also offers a range of other modules that connect to your ERP such as HR capability in Talent, CRM through Sales or Service, Field service or Project Service Automation to provide deeper operational capability and advanced retail modules. This modular approach allows you to only specify (and pay!) what you are using and really shape the capability of the system to your organisation. Dynamics is available in on-premise, hybrid or cloud to support the delivery approach that suits your organisation.

Benefits of ERP

The main benefit of an ERP system over a finance system is the connectivity, rather than having a number of systems that you use to run different parts of your business you have a single solution that sits on one set of data. This allows you to have a joined up view of your organisation which gives you a much clearer understanding of what is happening, making it easier to report on and forecast for. This information can also then be used to spot gaps or poor processes that you can target to drive greater efficiencies.

We expect over time accounting software will diminish and be reduced to an SME solution or over time increase their operational capability to enter the ERP market. When faced with the decision of ERP or accounting software you should consider how your business could benefit from the additional features of an ERP now and in the future and look at the different functionality available.


Find out more about Microsoft Dynamics 365 Business Central by downloading our guide.

For more information on any of the above please don’t hesitate to contact us.