Debit/Credit entry postings differences in ERP Systems

Find out interesting insights with Dave Sackett, VP of Finance at Persimmon Technology

Moderated by Emily, Digital Transformation Consultant at Hyperbots

Don’t want to watch a video? Read the interview transcript below.

Emily: Hi, everyone! This is Emily, and I’m a digital transformation consultant with Hyperbots, Inc. I’m pleased to have Dave on the call with me. Dave Sackett is the VP of Finance at Persimmon Technology, thank you so much for joining us today, Dave.

Dave Sackett: Yeah, thank you, Emily.

Emily: So, Dave, the topic we’ll be discussing today is debit or credit entry postings and the different nuances across ERP systems like QuickBooks, SAP S/4HANA, and NetSuite. To keep it brief, my first question is, how do the postings of debit and credit entries differ across these ERPs specifically when a vendor invoice is posted?

Dave Sackett: Okay, to answer that, I’ll categorize by small, medium, and large data requirements. QuickBooks might have the simplest and shortest journal entries in terms of debits and credits, followed by NetSuite, then SAP. SAP has a lot more complexity and required fields to post a transaction, so it’s a bigger effort in SAP compared to QuickBooks. NetSuite falls somewhere in between.

Emily: Understood. Thank you, Dave. Moving on, what are the main differences you’ve seen in tax handling among QuickBooks, SAP, and NetSuite when posting vendor invoices?

Dave Sackett: Similar to the number of fields each system requires, when it comes to tax compliance, there are tools that each ERP can leverage for tax assistance. QuickBooks, which I’m currently using, is quite simple. NetSuite offers more functionality and good APIs for tax services, while SAP is the most complex and thorough ERP, especially in handling international taxes.

Emily: Understood. So, Dave, what unique features does SAP S/4HANA offer for handling vendor invoices that differentiate it from QuickBooks and NetSuite?

Dave Sackett: With SAP, there’s a far greater opportunity for granularity in data tracking. You can track by vendor, region, or almost any business-specific criteria, which allows for detailed outbound reporting. It’s very complex, with many required fields, which support robust data tracking and reporting. So, if in-depth tracking is important, SAP might be the best choice.

Emily: Understood. Since you mentioned you’re currently using QuickBooks, what limitations does QuickBooks have in handling complex vendor invoices compared to SAP or NetSuite?

Dave Sackett: QuickBooks is generally geared toward small businesses, treating data somewhat like a checkbook. It doesn’t offer the depth of analytics found in NetSuite or SAP, which are better at tracking vendor assignments, purchase history, and FP&A analytics. So, compared to the other two, QuickBooks is limited in data gathering and analysis.

Emily: Understood. Also, Dave, how can AI-based external tools help improve the accuracy and automation of GL posting?

Dave Sackett: That’s an excellent question. Each ERP system can support AI integration, and the more complex the system, the greater value you gain from having API connections to third-party solutions for enhanced accuracy and automation.

Emily: Understood. Thank you so much, Dave, for discussing the differences between ERP solutions and explaining how AI can enhance them. It was great having you, and thank you for joining us today.

Dave Sackett: Yeah, thanks, Emily.

Navigate the ERP Maze: Step-by-Step Guide to get to the right ERP for your Business

Choosing the optimal ERP (Enterprise Resource Planning) system for your business hinges on a range of factors including industry type, company size, budget constraints, specific requirements, and scalability considerations. It directly impacts operational efficiency, productivity, and competitiveness.

With a myriad of options available in the market, finding the right ERP solution tailored to your business needs seems like a daunting task. However, with careful consideration and strategic planning, you can navigate through the choices to find the perfect fit. In this comprehensive guide, we’ll explore the essential factors to consider and provide industry-specific mapping to help you choose the optimal ERP for your mid-sized business.

Different industries have distinct operational workflows and regulatory requirements. Here’s how various ERP systems map to specific industries:

Manufacturing Industry

For manufacturing enterprises, the leading ERP options encompass NetSuite, Acumatica Cloud, Epicor Kinetic, IFS Cloud, Infor CloudSuite Industrial, Microsoft Dynamics 365 Business Central, SAP S/4HANA, SYSPRO, Global Shop Solutions, and Plex Manufacturing Cloud, offering tailored solutions.

In the realm of mid-sized organizations, the favored choices encompass:

NetSuite: Renowned for its adaptability to evolving business needs and its capacity to streamline operations efficiently.
Acumatica Cloud: Praised for its user-friendliness, scalability, and robust integration capabilities.
Microsoft Dynamics 365 Business Central: Valued for its intuitive interface and scalability.
SAP S/4HANA: Recognized for its robust analytics, real-time data processing, and scalability.
SYSPRO: Esteemed for its specialized focus on industry-specific requirements and its ability to scale alongside business growth.
Plex Manufacturing Cloud: Chosen for its scalability and industry-specific ERP functionality.

These platforms collectively address the intricate needs of mid-sized enterprises in the manufacturing realm, offering solutions tailored to production planning, inventory management, supply chain optimization, and shop floor control, thus catering to the sector’s unique demands.

Retail Industry

Retail enterprises can leverage ERP solutions such as Microsoft Dynamics 365 Business Central, SAP Business One Professional, Oracle Retail Merchandise Operations Cloud, SYSPRO, QT9, Epicor Prophet 21, Oracle NetSuite OneWorld, and Acumatica for optimizing their operations.

The most sought-after selections for mid-sized organizations include:

SAP Business One Professional: Tailored for small and mid-sized enterprises (SMEs), it is known for its scalability, customization options, and integration capabilities, making it suitable for mid-market companies with complex business needs.
Microsoft Dynamics 365 Business Central: Specifically designed for mid-market businesses, it offers scalability, a user-friendly interface, and integration with other Microsoft products.
Oracle NetSuite OneWorld: NetSuite OneWorld is a cloud-based ERP solution that caters to mid-market companies with global operations. It offers scalability, flexibility, and real-time visibility, making it well-suited for mid-market companies seeking to streamline their operations across multiple locations.
Acumatica: It offers flexible deployment options, including cloud and on-premises, and comprehensive functionalities including scalability, flexibility, and strong integration capabilities make it an ideal choice for retail and mid-market companies seeking a tailored and efficient ERP solution.

These platforms equip retailers with functionalities for omnichannel retailing, inventory management, pricing optimization, and customer engagement, enabling them to deliver seamless shopping experiences to their customers.

Healthcare Industry

Healthcare organizations can leverage ERP systems like Acuamatica, Aptean, Infor, Intact Software, S/4HANA, Focus X, Oracle Netsuite, and Infor.

The ERPs best suited for the mid-market segment are:

Acumatica: Offers a flexible and customizable solution suitable for mid-market healthcare companies. It provides modules for financial management, project accounting, CRM, distribution, and more, allowing healthcare organizations to manage their operations efficiently.
Aptean: Aptean offers industry expertise, robust functionalities, and commitment to compliance which makes it a suitable option for mid-market healthcare companies.
Infor: CloudSuite Healthcare is specifically designed for healthcare organizations, offering comprehensive functionalities for financial management, supply chain management, human capital management, and clinical interoperability.
Oracle NetSuite: Netsuite is designed to help mid-market healthcare companies improve operational efficiency, reduce costs, and enhance patient satisfaction.

These solutions offer capabilities for patient management, electronic medical records (EMR), revenue cycle management, and regulatory compliance, enabling healthcare providers to enhance patient care delivery and operational efficiency

Services Industry

Professional services firms can benefit from ERP platforms like Acumatica, SAP S/4 HANA, Workday (Certinia), IFS, Oracle, Infor, Odoo, Sage X3 and Microsoft Dynamics 365 Project Service Automation.

The optimal ERP choice for mid-sized businesses are:

Workday (Certinia): Workday offers cloud-based ERP solutions tailored for various industries, including services. Its ERP systems provide features for financial management, human capital management, and planning, enabling service organizations to manage their operations effectively.
Acumatica: Acumatica’s scalability, adaptability, and strong integration capabilities make it a preferred choice for mid-market service companies looking for a tailored ERP solution.
Microsoft Dynamics 365 Project Service Automation: Designed for service-based companies, it offers project management, resource allocation, time tracking, and billing.
SAP S/4HANA: SAP S/4HANA: Industry-specific solutions include financial management, project management, supply chain management, and customer relationship management, enabling service organizations to streamline their operations and improve efficiency.

These systems provide features for project management, resource allocation, time tracking, and billing, supporting services organizations in delivering projects on time and within budget.

Hospitality Industry

Within the hospitality sector, ERP solutions such as Infor Hospitality Management Solution (HMS), Tally.ERP 9, TYASuite, Oracle Hospitality OPERA Cloud, AlignBooks, Oracle Netsuite and Microsoft Dynamics 365 offer industry-specific functionalities.

Best-suited ERP for the hospitality industry in the mid-market segments are:

Oracle Hospitality OPERA Cloud: It is specifically designed for the hospitality industry, offering features for hotel property management, reservations, guest services, and revenue management. It provides industry-specific functionalities that cater to the unique needs of mid-market hospitality companies
Microsoft Dynamics 365: It offers solutions tailored for the hospitality industry, providing functionalities for guest management, reservations, customer service, and analytics.

Both Oracle Hospitality OPERA Cloud and Microsoft Dynamics 365 offer industry-specific functionalities, scalability, and integration capabilities, making them ideal choices for mid-market hospitality companies looking for efficient ERP solutions, enabling hospitality businesses to optimize guest experiences and maximize revenue.

Other Factors to Consider in ERP Selection

1. Cost:

Evaluate the total cost of ownership (TCO) of each ERP system, including upfront implementation costs, licensing fees, customization expenses, and ongoing maintenance fees.
Cloud-based ERP solutions often offer subscription-based pricing models, which can be more cost-effective for small to medium-sized businesses compared to on-premises solutions.
According to a study, the bare minimum cost of implementation for any ERP is approximately $100,000. However, depending on the unique requirements of your business, these ERP cost figures may vary a lot.

Apart from your business requirements, the level of customizations you require, the size of the business, the complexity of operations, and the number of users, are crucial factors that determine the overall ERP cost

2. Flexibility and Scalability:

Choose an ERP system that offers flexibility and scalability to accommodate your evolving business needs.

Look for platforms that allow customization, integration with third-party applications, and scalability to support business growth without disruption.
With cloud ERP systems, you don’t have to worry about installation, maintenance, security, or updates.They provide flexibility and scalability, as you can access them from anywhere, anytime, and adjust your subscription according to your needs. However, cloud ERP systems may also pose some challenges, such as data privacy, compliance, integration, and customization. On-prem ERP systems are installed and run on your own servers, which gives you more control and ownership over your data and system, however, on-prem ERP systems may also require more upfront investment, infrastructure, resources, and expertise to implement and maintain.

3. User-Friendliness:

Opt for an ERP solution with an intuitive interface and user-friendly features to facilitate adoption among employees.
Conduct demos or trials to assess the usability of each platform and ensure it meets the needs of your workforce.
A few important factors you should look at are: Good search and filter options, Flexible reports and an intuitive user interface

4. Integration Capabilities:

Consider the integration capabilities of the ERP system with other business applications and systems used in your organization.
Seamless integration with CRM, e-commerce, accounting, and productivity tools can streamline data flow and improve operational efficiency.
Integration can also help increase efficiency and reduce costs: When systems can communicate seamlessly with each other, there is no need to manually transfer data from one system to another. This saves time and reduces the risk of human error.

5. Vendor Reputation and Support:

Research the reputation and track record of ERP vendors, including their customer service and support offerings.
Choose a vendor with a proven history of successful implementations, responsive support services, and a commitment to ongoing product development.
Use real-life client reviews and use case studies as key indicators to establish stability and quality of an ERP.

To simplify the ERP selection process, here’s a step-by-step roadmap:

Assess Your Business Needs: Identify your industry-specific requirements, company size, and growth projections.
Research ERP Options: Explore ERP systems tailored to your industry and evaluate their features, pricing, and scalability.
Request demos and trials: Engage with ERP vendors to request demos and trials to assess usability and functionality.
Consider Total Cost of Ownership: Calculate the TCO of each ERP system, including implementation, licensing, customization, and maintenance costs.
Evaluate Integration Capabilities: Ensure the ERP system integrates seamlessly with other business applications and systems used in your organization.
Review Vendor Reputation: Research the reputation and reliability of ERP vendors, including customer reviews and references.
Select the optimal ERP: Based on your assessment and evaluation, choose the ERP system that best aligns with your business needs and objectives

Conclusion

By following this roadmap and considering industry-specific mapping, cost, flexibility, and other key factors, mid-sized companies can confidently choose the optimal ERP, laying the groundwork for enhanced efficiency, productivity, and growth.