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Key Takeaways

• ERP’s tend to be (1) accounting-centric, providing robust financial features, or (2) manufacturing-centric with inventory management and similar industrial functions.
• Don’t compromise on your Engineer To Order needs. A manufacturing ERP with accounting modules might be best for your ETO workflow.
• It’s also worth investigating an ERP that integrates with QuickBooks or other accounting systems. Some accountants prefer integration, as they are already familiar with it.

Finding an ERP with Accounting and Manufacturing

QuickBooks has become the top accounting system for small and mid-size businesses. According to Investopedia, QuickBooks consistently ranks as the top platform thanks to its active user base and impressive collection of tools and resources. We’ve also seen this appreciation for QuickBooks in the manufacturing sector. As an ETO manufacturer, though, you may be curious if a standard accounting system such as QB, or their rivals Sage and Xero is beneficial for a Custom Machine Builder.

Integrators, Panel Shops, and OEMs have such a unique workflow. Their processes and most standard solutions, including enterprise resource planning (ERP) systems, are incompatible. We’ve heard from many Custom Machine Builders who tried implementing a standard  ERP at their ETO facility but couldn’t make it work. The time and money lost are understandably frustrating.

An ERP that Integrates with QuickBooks

If you do a web search for “QuickBooks ERP,” you’ll see plenty of results, making you choose between accounting software and an ERP. Why not have both? If you were to integrate an ERP designed to match your ETO workflow with an accounting system like Quickbooks or Sage, you would have a very powerful combination… a system like that would help your organization become more efficient, accurate, and profitable.

In this article, we’ll explore the options so you can move forward and scale with confidence.

Types of ERP Systems

Interestingly, when it comes to ERPs and accounting, systems can be divided into two types of platforms.

1. Accounting-centric: Many ERPs are built from the accounting perspective first and then have a few manufacturing modules added in after. These accounting ERP solutions are typically big systems from big companies and come with big price tags. Such ERP systems are great for industries like retail or health care. Due to the limited manufacturing features, however, they may not be the best ERP for machine builders.
2. Manufacturing-centric: The other common ERP structure is a solution built for manufacturing but with accounting features added in; almost the opposite of the above. These structures are similar to MRPs and focus on manufacturing, engineering, and procurement. Manufacturing-centric systems are often a better option for machine building, especially in ETO manufacturing.

For Custom Machine Builders, the choice isn’t always clear. Both options can be valuable! So, let’s explore both and figure out the best ERP for your custom manufacturing team.

PROs of an Accounting-Centric ERP

• Financial Management: An accounting-centric ERP can process complicated transactions and reporting requirements. The tools to handle accounts payable and receivable, payroll, and managing the general ledger are impressive. Additionally, thanks to its robust financial management, accounting ERPs provide detailed financial performance your team could benefit from.
• Cost Control: Such in-depth insight helps Custom Machine Builders focus on costs, identifying inefficiencies and helping you choose the best cost-saving measures.
• Regulatory Compliance: Typically, you can trust the bigger accounting-based ERP systems to remain updated with current financial regulations. This is a great way to prevent penalties or legal issues.

These features are great, however, the entire system as a whole is often not the best choice for ETO manufacturers. That’s why it’s important to cover the downsides.

CONs of an Accounting-Centric ERP 

• No ETO: Settling for a standard ERP that focuses on accounting creates a lot of chaos for Engineer To Order organizations. You’re compromising the flexibility and control of the project, which could have ramifications in engineering, procurement, and sales.
• Limited Functionality: Many accounting based systems lack core features that a Custom Machine Builder can benefit from, including production planning and inventory management.
• Challenging Customizations: When ERPs become too limiting, such as missing out on inventory management, customizations are required to fill the gap. Unfortunately, perfecting an ERP designed for accounting is a lot more challenging and expensive than making customizations with manufacturing-based ERPs.

If you feel that these cons could compromise your organization’s success, you’re not alone. You may want to consider an ERP that prioritizes manufacturing.

PROs of a Manufacturing-Centric System 

• Efficiency: When manufacturing is the core focus of your ERP, it’s designed to enhance production. Tools such as inventory management and quality control are often built in to keep your organization running smoothly.
• Customizations: If you are missing a feature that will benefit your organization, these manufacturing-based ERPs are usually easier and less expensive to customize.
• Supply Chain Management: When working with procurement and inventory modules, your relationship with the supply chain is improved. You’ll have enhanced visibility, more buying power, and improved coordination with vendors.

A manufacturing ERP with accounting features can be great and benefit many Custom Machine Builders. There is a downside, though.

CONs of a Manufacturing-Centric System 

• Limited Financial Management: When an ERP or MRP focuses heavily on manufacturing, it limits the system’s financial functionality. An additional financial management module will be needed

As you’re starting to see, there unfortunately seems to be a correlation between accounting and manufacturing… the more accounting features there are, the fewer manufacturing features are provided, and vice versa.

It should be noted that manufacturing-centric ERPs are similar and often compared to materials requirement planning (MRP) software. While these platforms are powerful for standard manufacturers, they’re not necessarily a great fit for Custom Machine Builders. Engineer To Order MRP software is out there and can help improve your processes.

The Best of Both

Choosing an ERP/MRP that is truly ETO should be a top priority for all Custom Machine Builders. It has a positive effect on accounting, manufacturing, and the rest of the organization.

If you’re able to find a manufacturing-centric ERP that integrates with Quickbooks and other popular accounting systems, then you don’t have to worry about missing out on the ETO features of your ERP.

Some additional benefits for working with an ERP that integrates with QuickBooks:

• Cost-effective: Platforms like Quickbooks are affordable for small and medium-sized businesses. Their pricing is also likely to stay consistent and predictable.
• Ease of Use: One of the benefits that makes QB so popular is its user-friendly interface. The simplicity makes it accessible for individuals with limited accounting knowledge.
• Support: Whether you’re an accounting pro or just starting out, there’s a variety of online resources, including tutorials and support forums.
• Advanced Analytics: Combining an ERP designed for Engineer To Order manufacturing with Quickbooks provides your team with a wealth of knowledge. From this data, you can finish more projects in less time, reduce costs on materials, provide quicker and more accurate estimates, and more.

Don’t Deny your ETO Nature

It’s imperative for an Engineer To Order manufacturer to prioritize their unique ability to make custom machines. Their innovation is, after all, what attracts their customers. It’s also what makes their job so difficult. From estimating and quoting new projects, to building and releasing the bill of materials (BOM), to purchasing and accounts receivable; every step is made easier with an ERP designed for Custom Machine Builders.

Compromising efficiency and quality throughout the rest of your organization, simply to have an all-in-one solution is not worth it. This is especially true since you can integrate QuickBooks, Sage, or Xero with an ERP that’s designed for Integrators, Panel Shops, and OEMs.

That’s why Total ETO decided to Integrate with highly specialized best-of-breed applications. This allows us to focus on your unique ERP/MRP needs, while QuickBooks or a similar system takes care of your accounting needs, providing you with the best of both worlds.

Accounting + Total ETO

We’ve met a lot of accountants in manufacturing who love and prefer to continue working with their current accounting platform. We’ve also met some who would rather drop their system for one that can do ETO project accounting. Thankfully, with Total ETO, you don’t have to sacrifice to get what’s best for your business. Our ERP is designed to integrate with your current accounting system AND provide all the functions, such as project accounting.

From large builds to daily accounting tasks, your organization can accomplish a lot when you integrate your current accounting system with Total ETO. Purchasing, receiving, and payables batching are all detailed and managed within our ERP. Integration or posting of summary data to the payables module is simple. Tracking of all labor is also detailed within the system. Total ETO offers integration or posting to the payroll module or linking to outside service providers such as ADP, Paylocity, and Paychex.

Total ETO also includes real-time tracking and managing of your inventory, including work in progress (WIP) and percentage of completion (POC). Integrating this way allows your staff to purchase and sell in various currencies, converting them to your home currency for reporting. Project and job costing are done automatically, virtually eliminating all the effort required in the past.

Conclusion

Finding the right Engineer To Order MRP and ERP software can be challenging. When you find the right system, though, you’ll see it was worth the effort. It can also be nerve-racking to think about integrating an ERP with accounting software such as QuickBooks. The best way to eliminate your concerns is to book a demo.

Experience firsthand the efficiency, accuracy, and profitability of working with an ERP designed for your unique ETO processes.

We would love to show you the difference Total ETO can make.

Written by RJ Ahuja