Could you please research and explain why enterprise resourc

Could you please research and explain why enterprise resource planning systems are so popular these days? What is the difference between an accounting information systems and an enterprise resource planning system? Please provide the advantages and disadvantages for accountants. Be specific in providing your explanation with examples

Solution

Enterprise resource planning(ERP) is a system that automates a number of processes within an enterprise.

A good ERP can:

ERP comprises of smaller and customised modules.Each module is responsible for completing a particular task such as managing finance ,tax records,customer relationships,supply chains,accounts and more.

By having ERP a company can processes all operations with a single system. A company can save a lot of costs related to IT management.

Example: Instead of having to pay for updates for various systems, a company can get a single system updated and customised all at once.

Difference between accounting information system and an enterprise resource planning system:

Accounting information system:

Accounting information system is used for collection,Strorage,Processing of financial and accounting data that is used by the decision makers.AIS is nothing but computerised maintenance of accounts.

Enterprise resource planning or ERP system:

ERP is a fully integrated business mangement system covering all the functional areas of an enterprise like procurement, inventory, production, sales, finance, accounting, human resource and more.The objective of ERP is to make easy the flow of information between all business functions.

Advantages and disadvantages for accountants:

Advatages:

From the above discussion we can conclude that accounting is a part of function covered by ERP system, it maintains entire organisation data on a single database and reduces the duplication of input function.So that accountant and other people can get any information by this system.

ERP helps in planning effective use of resources and it is an important tool for management.

ERP is a complete solution package for enhancing the performane in larger organisations and meeting their requirements with ease and efficiency.

Disadvantages:

If ERP system fails to work, entire functions will come down. As it maintains entire data in a single database it has to be maintained and secured properly. Coming to accountant perspective, if an information relating to accounts is lost an enterprise will be in huge trouble and it will difficult to know its result at the year end.