Online accounting software or ERP: choosing the right fit

As a business grows, accounting software that once worked well may start to fall short. The same data has to be keyed in again by sales, the warehouse and accounts, or the month-end close drags on because the data sits in different places. The question then becomes whether to switch to a new online accounting package or whether it is time to invest in an ERP system.

This article sets out how the two options differ, the criteria to base the decision on, and migration steps that reduce the risk of disrupting day-to-day work.

Four-step diagram of choosing and moving to a new accounting system: map the processes, compare the options, test and go live — Choose a system based on how you really work first, then compare features and prices.

How online accounting software and ERP differ

Aspect	Online accounting software	ERP system
Scope	Accounting, tax, and issuing sales and purchase documents	Links the work of several departments, such as sales, purchasing, warehouse, production and accounting
Best suited to	Small to medium-sized businesses with straightforward processes	Businesses with several branches, stock or production, and a need for centralised data
Time to go live	A few days to a few weeks	Several months, depending on the scope
Cost	Monthly or annual subscription	Licence fees, implementation fees and system maintenance fees

8 criteria for choosing a system

Thai tax support: it can produce input and output tax reports, withholding tax certificates and the data needed to file the monthly VAT return (P.P.30, ภ.พ.30) and the withholding tax returns P.N.D.3 and P.N.D.53 (ภ.ง.ด.3 / ภ.ง.ด.53), and supports electronic tax invoices if you plan to use them.
User rights and change history: you can set who may create, approve or edit each document, and the system keeps a record of who changed what and when.
Integration: it imports bank statements, connects to point-of-sale systems or online shops, and offers an API for connecting other systems.
Inventory and costing: it calculates cost of sales using the method the business uses, and can track stock across several warehouses if needed.
Management reporting: results can be viewed by branch, project or product line without building extra spreadsheets.
Security and backup: multi-factor authentication, data encryption and a clear backup policy.
Data export: all your data can be exported in a standard format, so you are not tied to a single provider.
Total long-term cost: work out the cost over 3 to 5 years, including additional users, add-on modules and training.

Signs that it is time to move to ERP

Staff key the same data into several programs every day
Stock figures in the system often do not match what is physically there
The month-end close takes a long time because data has to be gathered from many sources
Management waits several days for reports before it can make a decision

Steps for a smooth migration

Map your actual processes: write down every step from receiving an order to collecting payment, along with the current problem areas.
Compare the options: ask vendors to demonstrate with your business's real scenarios, not their ready-made examples.
Clean up the master data: customer, supplier and product lists and the chart of accounts should be checked and de-duplicated before the move.
Set the opening balances: choose a go-live date at the start of a period, such as the start of a month or of the financial year, and confirm the opening balances against the trial balance.
Run in parallel: use the old and new systems side by side for at least one closing cycle, then compare the results.
Train users and assign responsibilities: users in each department should know what they must record and what they must check.

Common mistakes

Choosing on price or the number of features without looking at your own processes
Moving all the old, incorrect data into the new system
Customising the system so heavily that upgrading to new versions becomes difficult
Having no project owner on the business side with the authority to make decisions

Frequently asked questions

Is online accounting software secure?

Reputable providers usually encrypt and back up the data already, but the business still has to look after its own side, for example by turning on multi-factor authentication, setting user rights and immediately closing the accounts of staff who leave.

Can we change systems in the middle of the financial year?

Yes, provided the balances at the go-live date are carried forward correctly and the data for earlier periods is kept for checking. Starting at the beginning of the financial year, however, usually makes it easier to compare data and close the annual accounts.

Does a small business need ERP?

Not always. If processes are still simple, online accounting software that connects to the bank and to the sales system is enough. It is worth reviewing again once you have several branches, stock in several warehouses or production.

Let us help you choose and set up your system

Kerwin & Vance advises on choosing and setting up accounting or ERP systems, from mapping your processes to migrating the data and checking its accuracy after go-live. Find out more about our Accounting & Reporting and Technology services, or book a consultation with us.