What Is SAP Accounting Software?

by Fred Decker - Updated November 08, 2018
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Founded in Germany in 1972, SAP is the world's third-largest public software company behind Windows creator Microsoft and database giant Oracle. Accounting software has been one of its core business categories almost from the beginning, and SAP offers programs suitable for companies of any size from startups with a handful of employees to the world's largest corporations.

A Focus on Management

Modern business accounting follows generally accepted models, so there's an unavoidable degree of similarity between accounting programs. Their approaches may vary, but receivables, payables, a general ledger and similar core functions are found in most programs. Those things are an end in themselves, because you must report on your company's sales, earnings and payroll in order to meet your legal obligations. That same information can be used to display key data you need in order to manage your company's resources effectively for success and growth. That management view of the data is usually described as enterprise resource planning, or ERP, and it's the central focus of SAP's accounting products.

The Products

SAP offers accounting products for businesses of all sizes. Its products are scalable, so you if you successfully grow from a tiny startup to a huge multinational you'll be able to continue using and upgrading SAP at every step of the journey. For small companies with large ambitions, this is a significant advantage over popular accounting packages such as Sage or QuickBooks. SAP's software products can be deployed in your own premises, on SAP's cloud or in hybrid installations that use both for maximum flexibility.

SAP Business One

Business One is SAP's accounting software for small and medium-sized enterprises. It's available in versions customized for a wide range of industries, and for nation-specific taxation and employment standards. It also brings many of the features of the company's high-end products to the entry-level market, including sophisticated analysis and reporting, warehouse management, procurement and customer relationship management. You and your employees can access the software through an app on your mobile devices, so those features are available to you wherever you need to be.

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SAP Business By Design

For companies that have grown beyond being a small business but aren't yet major corporations, SAP offers a mid-range product called SAP Business By Design. It expands on the features offered in Business One to provide greater management and reporting abilities, and – like the flagship SAP programs for large businesses – processing is performed in system memory for faster results. This product is also well suited to standalone divisions or subsidiaries of larger corporations, which can use Business By Design internally but exchange information with full-scale SAP installations at the parent company.

SAP S/4HANA

SAP's flagship product is called S/4HANA. It can – and does – provide end-to-end management and accounting for some of the world's largest corporations. S/4HANA can be implemented directly in a client's on-premise data centers, in the client's private cloud, on SAP's hosted cloud or in any combination of those three.

Customization and Add-Ons

SAP's accounting and ERP products can be customized to an almost infinite degree in order to meet a client's needs. Each of its accounting products has numerous add-ons available off the shelf, which can also be tweaked to meet unique requirements. This makes for a classic "good news, bad news" scenario: The good news is that you can make SAP's programs do just about anything you want; the bad news is that getting there can be a non-trivial exercise. The company itself offers a broad range of support options, and a thriving community of third-party consulting firms provides assistance with installation, customization and product selection. SAP's software influences every part of your company's operations, so the cost of a botched installation goes beyond just the dollars. For example, analysts of Target's failed Canadian expansion point to its overly ambitious plans to implement SAP as one reason for that humbling catastrophe. Still, when it's implemented skillfully, SAP's accounting software fulfills the promise in the company's vision statement to "...help the world run better and improve people's lives."

About the Author

Fred Decker learned business fundamentals at second hand as an insurance and mutual funds broker, and at firsthand as a retail store manager and the chef/proprietor of his own restaurants. He has written hundreds of business-related articles for sites including Zacks.com, Chron.com, Vitamix.com, Bizfluent and GoBankingRates and many others. He was educated at Memorial University of Newfoundland and the Northern Alberta Institute of Technology.

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