As the world grows more complex, good software has become tailored to address essential functionalities while providing simplicity to the user. Today, there are many accounting applications developed to support specific industries. Industry-specific accounting software typically matches the sales and operations of an industry with accounting instead of having them each in a separate platform. These are also called industry Enterprise Resource Planning (ERP) systems. While this may seem ideal, an industry-specific accounting software package will come with its own set of issues. Just because a software is designed for your industry, doesn’t mean it’s designed for you or the future you want to build for your company.
Is Accounting Different Industry-to-Industry?
All businesses require accounting. You need strong financial management to turn a profit and achieve key milestones in business. This is true whether you’re a baker or a lawyer. The myth is that accounting is very different between industries, but this isn’t true. Accounting statements are not radically different throughout multiple industries, but the transactions used within different industries to create financial reports do vary dramatically.
Because of this, the question buyers face is whether to use an all-in-one industry-specific application that includes an accounting package or to combine an industry-specific operations package with a separate accounting system? Unfortunately, the typical all-in-one option usually leaves the accounting system lacking.
The Origins and Scope of Industry-Specific Accounting Software
Certain companies require additional features that serve the specific dynamics of that particular industry. For example, inventory management is an essential component for construction and retail business financial management, but not for lending organizations. Following the development of ERP and Customer Relationship Management (CRM) IT environments, tech developers saw a niche opportunity to develop independent, industry-specific solutions to address key functions.
Accounting programs were soon developed around individual industry categories such as construction, small businesses, nonprofits, and other fields. The key selling point of such software is that they contain relevant functionality to run operations for the specific industry based on common standards and practices. But therein lies the main problem.
Industry-specific accounting software typically fails at fully delivering quality accounting functionality. The industry-specific software provider is so busy creating functions specific to the operation of the industry that the program often neglects standard accounting features. Accounting is really just there as an add-on feature to boost the industry ERP’s requirements checklist in the customer’s buying process. Therefore, such packages carry a lot of disadvantages.
Pitfalls of Industry-Specific Accounting Software
Customization is an essential factor in any software you use for business, how well you can adapt the tool to fit your needs. While industry-specific accounting ERP apps have some customizable properties, they’re usually very limited in capabilities with customization and automation functions.
Your typical industry-centric accounting application is also difficult to integrate with the other software used to run your business. To link your finances with other programs, you may need to hire professional help and/or purchase intermediary tools to share the data with other software. This leads to high maintenance costs and disrupts your overall management system. If the software package doesn’t provide the precise accounting functions you need for your individual business, this will necessitate even more software and integrations. The truth is that industry-specific accounting apps are molded for a business type, they aren’t constructed for your exact business.
“Industry-specific accounting software typically fails at fully delivering quality accounting functionality. The industry-specific software provider is so busy creating functions specific to the operation of the industry that the program often neglects standard accounting features.”
Why Settle for a Mold?
Scalability is another issue with industry-specific accounting programs and ERPs. These solutions are great when you don’t need to combine business models or aren’t interested in being entrepreneurial by adopting new technology to service customers. However, if you are looking to grow your business by using more technology and a range of financial processes, you’ll inevitably be limited by the confines of that software.
Breaking The Mold: Access to Platforms
The best way to avoid the constrictions of an industry mold is to use a business platform that hosts all the tools needed for the business. This actually gives you the best of many worlds.
Business platforms enable multiple companies to develop and connect their technologies together in a single home because integrations are lightweight or unnecessary. A conventional industry ERP is made and supported by only one software company that gives you ‘their’ mold. On the other hand, a business computing platform allows you to build a management system of multiple, different software applications that will support your work. This means you can pair an industry-focused application with a dedicated accounting system that still draws financial details from the other applications you use.
For example, looking at the Salesforce platform, TechCanary, an insurance policy management system, and
Because all of these solutions are connected on the Salesforce platform, a customer can have access to all three of these solutions. This means that any industry can choose the software they need and customize how they work together without sacrificing functional proficiency in their accounting or operations. Platforms simply give you more tools, options, and freedom to pilot your business.