When Does a Growing Business Need More Than Accounting Software (2026)
Accounting software is a big help for a new business.
Generating invoices, entering expenses, tracking payments, and producing financial reports is all pretty intuitive. For a long time, you may use just this software, along with a couple spreadsheets for tracking inventory, and another application for tracking customers. You may email everything else and things may work well for your business.
Then things start to grow.
There are more products. More sales mean more complexity in the purchasing process. New warehouses. More employees, which means more people needing access to the same information.
Accounting software usually does its job. Things around it, however, are becoming more problematic.
At this point, it's probably worth evaluating an ERP solution specifically for SMEs.
What Is ERP Software for SMEs?
ERP stands for Enterprise Resource Planning. Don't let the name intimidate you, ERP software isn't just for big corporations. Small and Medium Businesses can connect various add-on features of their operations with an ERP software.
An ERP system tends to integrate the following:
- Accounting and Finance
- Sales
- Purchasing
- Inventory
- Warehousing
- Customer Information
- Reporting
- Business Operations
Information is no longer siloed among multiple unconnected applications.
SAP Business One provides financial management and core ERP functionality for the small and midsize market segment for purchasing, sales, customer management, inventory, reporting and analytics.
Accounting Software and ERP Systems Have Distinct Characteristics
Accounting software and ERP systems have distinct characteristics. Accounting software deals primarily with financial transactions. ERP systems deal with the same financial transaction, but also involve many other activities and interfaces.
Suppose a customer places an order with a distributor. Someone in the sales team inputs the order. Someone else verifies if the inventory is sufficient. If inventory levels are low, someone else in purchasing may need to place an order with the supplier. The warehouse needs shipping info. The accounting team will eventually need to input the financial transaction.
When different software is used for different functional activities, employees are often forced to enter data in multiple locations.
Accounting Software Is Sufficient if Operational Complexity Is Low
Accounting software is sufficient if operational complexity is low. There is no need to replace working software. A small business may be fine with accounting software if:
- Volume of business transactions is limited
- Inventory is not complex
- Operations are centralized at a single location
- A few employees require access to business data
- Reports are quick and easy to generate
- Manual processes are not time consuming
ERP should be considered as a solution to a problem, not the motivation to embark on a technology project, simply because a business feels that software is outdated.
There is no employee count or a revenue figure that signifies every small business will need an ERP solution. Operational complexity is the best indicator. A 20-person distributor with multiple warehouses may need ERP before a much larger professional services firm.
Some things are worth watching for.
systEms Becoming Disconnected
That's why we look for systems becoming disconnected signs.
Repeated inputting of the same information is one of these signs. For instance, a customer order can show up an order management system, be then entered into an inventory system, and be inputted again by accounting.
Every repeated input of a customer order becomes an opportunity for a mistake to be made.
Reports Take too long
A manager requests a report. Information is collected. Data starts to be entered into various systems.
By the time the report is completed, some of the information will be outdated.
This is a process problem, hence not just a reporting problem.
Unreliable Inventory Records
Inventory may be the fastest way to notice a problem with disconnected systems. For instance, there may be 100 units available in an inventory system, but sales has committed 25 units. Meanwhile, the warehouse has some number. Nobody has made an error, the systems are just not coordinating.
Different departments have different data
If you ask sales for a number, there is a particular answer. If you ask accounting, there is a different answer.
These lead to extra communication and make things simple that don't need to be.
Work Gets Disconnected as the Business Grows
Growth of the business should lead to more orders and larger volumes of sales. It shouldn't lead to twice the administrative work.
That's generally a sign that systems are not scalable. If every incremental increase in sales requires more work, then the existing systems of the business cannot grow with the business.
The True Power of an ERP System Lies in Its Ability to Connect
The true power of an ERP system lies in its ability to connect.
ERP systems improve visibility across the entire business.
Connected systems allow siloed departments to communicate and provide up to date information in one place during the action that needs the information rather than requiring the user to search for the information.
There is little need for duplicate data entry, and connections allow information to be transported around the business ecosystem quickly and easily.
Product companies can rely on accurate inventory information to maintain good customer service. Information from various aspects of the business, like purchasing, warehousing, selling, and customer service can all be coordinated by better inventory information.
Standardization of business processes is possible when more consistent workflows are introduced. Many small companies rely on remembering individual employees' unique approaches. This is risky for a growing business because continuity can be lost with employees.
Better operational and financial data lead to better and more focused reporting.
Complex Operational Systems Are Best Suited to an ERP System
Complex operational systems (such as distribution and wholesale or manufacturing) are best suited to an ERP system.
Manufacturers have to juggle materials, purchasing, production and inventory, accounting, and sales.
This creates a demand for interconnected information.
Understanding the need for strong integration is why Winshuttle's products have helped large, complex businesses across multiple industries. Whether it is better reporting for service companies by controlling finances on their growing team, or product-based businesses in need of better inventory management from newly diversified sales channels, Winshuttle's solutions empower staff to focus on the core of their business.
procure-to-pay (P2P) to order-to-cash (O2C) processes. Connecting your financial systems is made simple with Winshuttle Studio.
Preparing for an ERP System
Though the SME market is a priority for Winshuttle, purchasing an ERP system does not mean that businesses are automatically prepared for the change. Companies must understand what they wish the new system to address.
Approaching new systems with the following questions is recommended.
- Which processes create the most delays?
- Where is data entered more than once?
- Which reports are the most difficult to prepare?
- What are the data accuracy concerns?
- Which applications are connected?
- Who are the end users?
- What skills must employees have to prepare them for the ERP?
Understanding the above lets companies implement new systems with ease.
SMEs trust Stratwit Solutions Ltd. to perform the necessary planning prior to the technical implementation of an ERP system.
The company's approach is unique in that it performs the necessary workflow and process reviews, business requirements analysis, data migration, end user preparation and implementation planning as per the actual business needs.
Two similar SMEs may need different systems.
Thus a distributor may have challenges with inventory and purchasing.
Could Your Business Benefit From ERP Software?
Take the time to understand where your business processes currently stand before investing in an ERP.
There comes a point when the means of solving a problem becomes just as complicated as the problem itself.
Disconnected Systems, slow reporting, data silos, unreliable inventory and complexity of manually performing repetitive tasks are sure signs that investing in ERP software would greatly benefit a business.
Stratwit Solutions Ltd.'s key expertise lies in
