Financial information is the fuel that keeps every business growing and moving forward.
A core part of any accounting system is the general ledger, which captures and categorizes the many different types of transactions a business engages in daily. General ledger transaction entries are diverse and cover the core areas of any company’s business. Financial data reported in general ledgers include revenues generated from sales, service and licensing fees, along with the different classifications of expenses, assets, liabilities and forms of equity.
Enterprise accounting systems are designed to streamline and simplify the complex workflows needed for running a business. As no two businesses are identical, enterprise accounting software programs are designed to be easily customized and scale to specific businesses’ requirements. As a result, the leading enterprise accounting software applications support billing management, payment processing and management, distributed order management, advanced analytics and business intelligence, supply chain, and inventory management.
The larger and more diverse an enterprise, the more common it is for their enterprise accounting systems to be integrated into an Enterprise Resource Planning (ERP) system. ERP systems have become a platform that many companies choose to run their businesses on, integrating accounting, Customer Relationship Management (CRM), Human Resource Management (HRM), Supply Chain Management (SCM), logistics, pricing, order management and many other applications needed to run their businesses successfully.
There’s a wide variety of enterprise accounting software programs available today, and our goal is to provide you the guidance you need to select the best one for your needs. Core features, functionality, and an overview of the top ten enterprise accounting software applications are provided next.
Enterprise accounting systems are designed to scale and support a wide variety of financial analysis, compliance and information needs across organizations. As a result, the variety and number of enterprise accounting systems are as diverse as the businesses using these systems today.
All share a common set of core features that are defined here:
- Accounts Payable – Tracks, automates and controls all outgoing payments a business makes to suppliers and creditors. Advanced enterprise accounting systems allow for accrual and cost-based approaches to defining Accounts Payable workflows and reporting. Contracts, invoices, purchase orders and receiving reports are the sources of information that this module in an enterprise accounting software relies on to complete tasks and complete payments. Payroll is the most used Accounts Payable workflow in many companies as it represents the largest single expense many incur on a monthly basis.
- Accounts Receivable – The series of accounts that track the money due to a company for delivering products and services to Enterprise accounting systems provide Accounts Receivable integration to credit verification and analysis services to minimize the risk of a company providing credit to a customer who may not be financially able to pay. Advanced enterprise accounting systems will automatically generate Accounts Receivable aging reports to alert business owners of receivables getting beyond agreed-upon credit terms. In general, the longer a receivable is not paid the less the chance of getting full payment. Accounts Receivable modules in enterprise accounting systems provide analytics and alerts to give business owners a chance to recover the full amount due.
- Bookkeeping – This area includes the processes required to complete adjusting entries after automated reports have been produced and the resolving of revenue and asset reporting discrepancies. Advanced enterprise accounting software provides for alerts and automation of these workflows with exception handling on the part of an accounting staff.
- Financial Reporting And Basic Analytics – The foundational reporting and analysis that all businesses run on including balance sheets, income statements, statement of cash flows and for publically-traded companies, the statement of stockholder’s equity. Enterprise accounting systems design in these workflows so they integrate all core and optional modules into a unified system of record used to generate accurate statements and reports. One of the most important aspects of financial reporting and basic analytics in enterprise accounting systems is the ability to generate reports and statements that are in compliance generally accepted accounting principles (GAAP) and specific standards defined by the Financial Accounting Standards Board (FASB). If your business operates in multiple nations, it’s important to see if the enterprise accounting software providers you are considering has experience achieving complaint reporting in the geographies you are now and plan on operating in.
- General Ledger – The chart or group of all accounts that a business relies on to operate, general ledgers often have hundreds of specific accounts that are used to track a company’s transactions. The accounts that comprise general ledgers are organized into balance sheet and income statement groups. The balance sheet accounts include assets, liabilities and equity. The income statement accounts include the many forms of revenue a company generates, expenses, gains and losses from operations. Advanced enterprise accounting systems support accrual, cost-based, project-based and value-based definitions of accounts in the general ledger. The general ledger is the system of record enterprise accounting systems relies on to provide reporting, analytics, initiate alerts on Accounts Payable and Accounts Receivable
- Inventory Systems and Cost Flow Analysis – Provides reporting on inventory positions by location, product, price, and supplier and in advanced warehouses, Radio Frequency Identification (RFID) tag number and descriptor. All enterprise accounting systems support inventory systems and cost flow analysis, with the most advanced ones providing greater control of perpetual and periodic inventory options. This latter approach of periodic inventory is less expensive to implement yet there is no way to tell from the general ledger the amount of inventory of the cost of goods sold at any point in time. Perpetual inventory systems are increasingly becoming commonplace thanks in large part to cloud platforms that allow for real-time integration of geographically diverse inventory locations with the main instance of the enterprise accounting system. One of the major benefits of using an enterprise accounting system for perpetual inventory system management is that the Cost of Goods Sold account is updated in real-time and managers can see the impact on profitability immediately. Another aspect of inventory systems to evaluate enterprise accounting software providers on is support for cost flow assumptions that impact inventory valuation. The best enterprise accounting systems today support First-in, First-Out (FIFO) and Last-In, First-Out (LIFO) inventory valuations on a periodic and perpetual basis.
Top Ten Functional Benefits Of Enterprise Accounting Software
The functional benefits of enterprise accounting software include the following:
- Gain greater accuracy and efficiency in tracking all transactions that are integral to a company’s operations, quickly finding cost and time savings in the process.
- Improve cash management and get visibility into a company’s cash flows, payment processes, and receivables impact on liquidity.
- Accelerate Account Receivables performance, having invoices paid faster and for the full amount, reducing bad debt expense.
- Better manage Accounts Payable to take full advantage of all discounts and reduce costly penalties and fees for late payments.
- Have a single system of record for all accounting transactions that scales with the launch of new products, services, and business units globally and that increases the speed of reporting and financial analysis.
- Have greater control over operating expense (OPEX) and capital expense (CAPEX) costs and spending, and how they each impact the overall profitability of your business.
- Better manage recurring operating expenses including travel, training and monthly recurring leases, contracts and agreements.
- Streamline financial reporting across your entire organization by having dashboards and reports generated in real-time based on a person’s role and information needs.
- Forecast and anticipate how and where costs will shift over time using advanced analytics that takes into account your company’s history of performance on key indicators.
- Stay in compliance with generally accepted accounting principles (GAAP) and FASB requirements for reporting.
Top Enterprise Accounting Systems
- Acumatica – A leading provider of cloud-based ERP applications built on the company’s platform, the Acumatica suite of applications are known for their ease of use and versatility. The company is currently selling the Acumatica Financial Management Suite, Acumatica Customer Management Suite, Acumatica Project Accounting Suite, Acumatica Distribution Management Suite and Acumatica Manufacturing Management Suite. Acumatica sells entirely through partner channels, relying on resellers to customize and tailor their applications to the unique needs of customers.
- Epicor – Epicor has a broad range of enterprise applications including those for manufacturing, distribution, retail and service businesses. While Epicor is best known for its broader ERP suite, the company sells the financial modules on a stand-alone basis. Epicor has integrated the financial reporting functionality from Epicor Enterprise and iScala successfully into their product suite. The company sells direct and through reseller partners.
- FinancialForce – First launched as a joint venture between Unit4 and Salesforce, the company has excelled at creating SaaS core financial applications on the Salesforce platform. In 2010, the company moved into professional service automation by acquiring PS Enterprise from Appirio. In 2013, FinancialForce acquired Vana Workforce and Less Software, adding HCM and supply chain capabilities, respectively. All acquired products are on the Salesforce platform, which makes FinancialForce ideal for companies with investments in Force.com and comparable Salesforce-based architectures. Additional product enhancements include subscription billing, developing translations and localizations. The solution is available only as public cloud SaaS and is sold directly.
- Microsoft Dynamics AX – The series of financial reporting apps that comprise Microsoft Dynamics AX are based on Axapta, an application first released by the Danish company Damgaard in 1998. Damgaard merged with Navision Software in 2000, and Microsoft purchased the combined company in 2002. Since then Microsoft has invested heavily in Dynamics AX financial applications to increase their functional depth for multicountry legislation support, intercompany reporting, consolidation, and reporting. Dynamics AX is sold direct and through a partner channel.
- Intacct – Intacct’s focus is on providing small and midsize organizations with online financial applications at an affordable price. Launched as a startup in 1999, the company is one of the first to successfully develop and sell multitenant SaaS business applications. Intacct sells direct and through reseller partners.
- NetSuite – NetSuite initially focused on financial applications and then expanded its product footprint to include increasingly more ERP functionality. The company has since invested in CRM and e-commerce application development, in addition to spending its global financial management reporting capabilities. Today NetSuite offers financial consolidation and complex multicurrency and tax handling and greater customization of the general ledger. The SuiteCloud Platform is specifically designed to provide partners the option of extending, customizing and integrating applications. NetSuite currently sells through both direct and indirect channels.
- Oracle PeopleSoft Enterprise – Oracle acquired PeopleSoft in 2004 and has continued to add additional financial reporting capabilities to this suite of accounting and finance applications. Oracle also continues to invest heavily in streamlining the overall performance of PeopleSoft financials on the cloud as well. Currently, Oracle is offering this suite on-premises, hosted by partners, and as a private cloud deployment.
- Workday – Workday is a cloud-only ERP software provider who created their multitenant SaaS architecture. As a result, their financial accounting systems are highly scalable and often deployed across large-scale enterprises. Workday’s initial success as an enterprise cloud software provider was earned in the Human Capital Management (HCM) market, where the company is a leader. The company’s financial applications include Workday 24 and 25, which has delivered more industry functionality including financial analytics and localization support for international locations. Financial Management is sold direct and is a multitenant public cloud solution.