ERP and project accounting software integration

Enterprise resource planning tools are adding new functionality each day, or at least it feels like it, and that often pushes into areas where you’ve got existing software. Paying for a big ERP package makes it tempting to move to these new modules or integrate different packages to make the most of your investment.

One of the most significant areas of benefit, impact, and business terror is the integration of ERP and accounting software. If done right, you could have a much smoother operation, so let’s look into a few elements to know, so things are done correctly. 

Differences between ERP and project accounting software

The lines between many different software packages are starting to blur, especially as companies realize that related functionality could make a system work better or generate a little bit of extra revenue. This is why we’re starting to see more Googling of questions like ‘Is QuickBooks an ERP system?’ and ‘Best accounting modules in ERPs'.

The best way to think about ERP and project accounting software is that an ERP is a larger, business-wide package that covers resource management and utilization outside of financials. ERPs can include workforce and HR tools, metric tracking across a business, customer support tools, and more. Project accounting software is a narrow slice of those elements and strictly deals with the financials themselves. They touch on payroll, balances, accounts payable, sales orders, ledgers, timesheets, etc.

The reason we’re seeing more ERP and project accounting software integration is that they both utilize the same financial data to generate their reports, with an ERP also giving companies context around elements that can impact business finances (productivity, product lifecycles, and some supply chain data).

When you start looking at very robust ERPs, they include many of the tools and functionality that accounting software provides. So, we’re starting to see ERP accounting modules replace separate software packages in some instances.

Best practices for integration of the two

There are a few things to consider when you’re looking to combine ERP software with other accounting software. Let’s look at some of the most important considerations, ways to protect yourself during the process, and what to think about as you grow. Here are the three things to be aware of before you start:

• You need a common data foundation. While most systems will accept the same files and data types, not all do. Review your existing software and determine what works and where you have issues that could prevent you from using the same database, report exports, data entry points, and more.
• Finalize integration points before you start. After reviewing your data, trace its path from collection to the desired outcome. Look at data sources and targets, examine areas where data flows one way or is bi-directional, and then consider two timing elements that must work in conjunction: how often is data added/updated and how often is your analysis run.
• Every user needs a voice. When combining any two systems, you’re going to have a lot of people who are impacted. Assign leads from each group to have a conversation with your project manager to ensure everyone’s needs are met and no functionality is lost or duplicated without people being aware.

The last concern we’ll mention depends entirely on the systems you’re using. Many project accounting tools and ERP accounting modules store the contact information in separate ways. You might have a single record per customer, multiple people under a unique profile, or various hierarchies and subsets.

Review this element carefully as you plan your integration. It’s a piece that often falls outside of our thoughts when we’re thinking about “data” and not understanding changes here can lead to record loss and other significant headaches.

Slow and steady wins the race

Business software is growing more complex, user interfaces are being simplified, and almost every software maker is trying to expand into new verticals. These trends are leading to greater availability of software like ERP and project accounting, but the business impact of software overlap can be confusing.

When you’re considering project accounting software integration, whether you’ve got separate systems or just want an ERP module, take your time, talk with everyone you can, and plan for both a smooth and bumpy transition to protect operations.