Accounting systems for large businesses are often incorporated into larger software systems that provide multiple functions. One of the terms for this type of database programming is ‘enterprise resource planning’, or ERP. The concept behind ERP is that income and expense data of all types and from multiple locations is assembled into a single program: one that provides corporate management with the tools it needs to run the business effectively.
There are at least two major accounting issues facing almost any large corporation: integration and scalability. Many corporations have acquired businesses – former competitors, perhaps – whose accounting systems need to be incorporated into the corporate program. Often, those accounting systems are different software programs, or are running on different platforms – one on UNIX, one on Microsoft. Scalability means that an accounting software program must be able to grow with the business that is using it, including major growth spurts such as acquisitions.
ERP programs treat accounting as one component of a larger data gathering program. Accordingly, they are often designed to integrate with a number of different accounting programs, or at least be adapted to do so. As a final variable, accounting programs can be written in a number of computer languages, and integrating programs must take that challenge into account as well.
Major firms selling enterprise management software include Oracle, Microsoft Business Decisions, SAP and Great Plains. These software packages include all of the standard accounting functions along with customer relations management (CRM) tools, project management tools, sales programs and other specialized information formats.
Instead of accounting functions all working off of an Excel spreadsheet format, they are provided in modules and tied together to meet the needs of the business. Software of this size and complexity is rarely sold off-the-shelf. Programs are customized to interface with existing software and the languages that they use.
Expense entries, for example, become a simple process. The software categorizes the expense and places it in the appropriate record or records, applies any manipulation necessary (such as taxation category), enters that record and includes it in any periodic report that the system is designed to generate. Simple entries then become tax records, a payable invoice and part of multiple reports that are used to analyze business functions.
Most accounting functions are handled in similar fashion and can be entered from multiple sites. Payroll functions are automated based on the original entry for the employee; withholding functions and payroll records are automatically updated. Elsewhere, reports, charts and any regulatory information needed that include the cost of personnel are generated for the purpose of business analysis.
Such is the nature of modern day big-business accounting. Making it all fit together is an expensive process that involves costly software and pricey consulting technicians. There is an entire class of software called “middleware,” whose sole purpose in the digital universe is to provide the interface capability between existing database programs, accounting programs, retail point-of-purchase programs, and other components that need to be pieced together.
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