What is the difference between ERP and traditional accounting?

One of the biggest difficulties when applying ERP in Vietnam is the difference between the accounting accounting method in the ERP system and the traditional accounting organization management methods of enterprises.

This is a common problem for most Vietnamese enterprises when using ERP solutions, especially foreign ERP software solutions.

Differences between ERP and traditional accounting software:

  • Recorded by accounting entries

In foreign ERP systems, accounting is not the starting point but the result of information processing. Every business operation in the production and business process is recorded by an accounting entry on the system.

Along with the business process is divided into many different stages, the accounting profession is also divided into many different pairs of entries.

  • Set up an intermediary account

Although this is a difference compared to Vietnamese accounting, but from an economic perspective, the movement of assets and capital in the above operations has not changed.

To ensure that the balance sheet of the enterprise does not generate much more than the old accounting method, the enterprise may use accounts that are not part of its official account system and treat them as accounts. middlemen.

  • Automatic accounting

In addition to the general accounting module, which performs the accounting directly like normal accounting software, all other ERP modules conduct automatic accounting and the 1: n or n accounting rule. : 1 not set. Therefore, it is not possible to separate the balances of the accounts according to each reciprocal account.

This is an important issue for most accountants in Vietnam because we are still familiar with controlling data in a reciprocal manner.

However, it is important to note that the big difference between ERP and accounting software is that the entries are generated automatically and are controlled multiple levels through the approval process, thus making mistakes. About the accounting almost does not happen.

  • Reverse the entry entry

With the meaning of a system that most accurately reflects the economic activities arising in an economic organization, the ERP system does not allow users to delete any entries that have been accounted into the system. All the user can do is perform the island entry.

Because of this feature, users may feel uncomfortable because all their mistakes are controlled. However, thanks to this feature, the accounting data provided by the ERP systems are always highly reliable for shareholders as well as partners outside the business.

How is ERP software different from traditional accounting

  • Complete operation

Because the system is designed to manage a process, if you cut off one of the stages of a process, the control function of the system will no longer make sense. As a result, controlling accounting data will also be difficult.

However, in cases where it is required to cut off some processes, in order to stay in control, it is necessary to create associated objects as well as set out the execution rules, forcing users to comply.

  • Flexible account system structure

In addition to the account system issued by the Ministry of Finance of Vietnam, you can build an account system with many dimensions of information. It can be said that the flexibility of the account system can meet all requirements of analysis and financial management of an enterprise, of all sizes.

  • Merging reports from member units

The centralized data mechanism of most ERP systems allows easy and easy consolidation of data for multi-branch businesses. The only thing they have to do is query the data already available with the tools that the system provides.

Thanks to the flexible ERP management structure, adding a new member unit or management level in the ERP system is made simple.

  • Honest picture

Because of the characteristics of accounting at the same time as professional operations, the accounting data system always reflects promptly and honestly the production and business activities at each stage on the system.

On the ERP system, accounting plays a role of controlling production and business activities through the figures that the system reflects.