Accounting isn’t just about crunching numbers—it’s about making sense of a business’s financial story. Whether you’re a professional accountant or a small business owner managing your own books, knowing what to track (and why) can make the difference between staying ahead or falling behind. Here are the essential financial elements every accountant should monitor—and how doing so supports both long-term success and day-to-day operations.

1. Assets: What You Own

Assets represent everything the business owns that has value. This can include cash, inventory, equipment, property, and accounts receivable. Keeping an up-to-date record of assets helps you understand your current financial strength.

Example: A construction company tracks its equipment, vehicles, and outstanding invoices to assess liquidity and operational readiness.

2. Liabilities: What You Owe

Liabilities are your financial obligations—loans, credit card balances, unpaid invoices, and taxes owed. Tracking liabilities ensures you’re aware of upcoming payments and helps you manage cash flow effectively.

Example: A software startup monitors its business loan repayments and deferred vendor payments to forecast future obligations and avoid liquidity issues.

3. Equity: The Owner’s Stake

Equity reflects the owner’s share in the business after liabilities are subtracted from assets. It represents retained earnings and any additional capital invested.

Example: A sole proprietor uses equity tracking to understand how much of their business’s success is being reinvested versus drawn as income.

4. Income: What You Earn

Tracking income means recording all the money your business brings in, whether from product sales, services, subscriptions, or other revenue streams. This gives you a clear view of your top-line performance.

Example: A clothing boutique tracks daily sales from both in-store and online transactions. This helps identify peak shopping times and bestselling items.

5. Expenses: What You Spend

Monitoring expenses is just as critical as tracking income. This includes costs like rent, utilities, salaries, materials, and subscriptions. Categorizing expenses properly makes it easier to analyze profitability and control unnecessary spending.

Example: A marketing agency logs monthly software subscriptions, freelance payments, and office rent to monitor overhead and manage client billing more accurately.

Why Tracking These Metrics Matters

Monitoring your core financial data isn’t just good practice—it’s foundational to running a healthy business. When you regularly track income, expenses, assets, liabilities, and equity, you gain a current and comprehensive picture of your financial position.

This visibility empowers you to make timely decisions—like when to invest, reduce costs, or pivot strategy. It also helps you stay compliant with tax laws and reporting standards, improves budgeting, and builds trust with investors and lenders.

In essence, staying on top of these numbers gives you clarity, control, and confidence.

How Accounting Software Simplifies It All

Modern accounting software, like AccountEdge, automates much of this tracking. It links to bank accounts, categorizes expenses, generates financial reports, and keeps your books organized and audit-ready. For growing businesses, it turns complex financial data into clear, actionable insights—freeing up more time to focus on what really matters.

In short: when you track the right things, you make better business decisions. And when you use the right tools, tracking becomes second nature.

Accounting has been around for thousands of years, long before spreadsheets, software, or even coins. It has evolved alongside human civilization, growing more complex as societies, economies, and businesses developed. Here’s a look at how accounting came to be the essential business tool it is today.

Ancient Beginnings: Keeping Track with Clay

The earliest records of accounting date back over 7,000 years to ancient Mesopotamia. Merchants and temple administrators used clay tablets and styluses to record transactions involving livestock, crops, and goods. These records helped track debts and inventory, laying the groundwork for bookkeeping practices.

In ancient Egypt and Babylonia, accounting was used to manage taxes, storehouse inventories, and trade. The focus was simple: track what came in and what went out. The concept of recording financial information for accountability was already taking shape.

The Roman Empire: Expanding Recordkeeping

By the time of the Roman Empire, accounting systems had advanced. Romans used detailed written records to manage everything from public funds to military supplies. They even kept daily journals and cash books, mirroring today’s general ledgers and journals. These practices supported the administration of a vast empire and made it easier to govern large populations and economies.

The Birth of Double-Entry: A Renaissance Revolution

One of the most significant moments in accounting history occurred during the Renaissance in 1494. Italian mathematician and Franciscan friar Luca Pacioli published a book called Summa de Arithmetica, which described the double-entry bookkeeping system: a method where every transaction is recorded in two accounts, balancing debits and credits.

Pacioli didn’t invent double-entry bookkeeping, but he was the first to codify it and explain it clearly. His work helped spread the system across Europe, influencing business practices for centuries to come. To this day, he is known as the “Father of Accounting.”

Industrialization and Modernization

The Industrial Revolution brought new challenges: large-scale production, complex supply chains, and growing companies. As businesses scaled, so did their accounting needs. Ledgers and journals evolved into formal financial statements, and accountants became essential to managing growing volumes of financial data.

During the 19th and 20th centuries, professional accounting bodies formed in the UK and US, establishing standards, ethics, and certifications. Auditing also emerged to ensure accuracy and public trust in corporate reporting.

The Digital Era: From Paper to the Cloud

With the rise of computers in the mid-20th century, accounting entered the digital age. Software began to replace manual ledgers, making it easier and faster to record, organize, and analyze financial data.

By the 1970s and 1980s, spreadsheet programs like VisiCalc and later Microsoft Excel revolutionized how accountants worked. These tools provided a more flexible, visual way to manage numbers and became the standard for small business bookkeeping and financial analysis. Excel allowed users to build formulas, track budgets, and model financial scenarios—all without a physical ledger in sight.

In the 1980s and 1990s, desktop accounting software emerged as the next step in the evolution, offering more specialized functionality tailored for bookkeeping, invoicing, and payroll. Small businesses could now manage their entire accounting process on a single machine.

Today, cloud-based platforms like AccountEdge offer even more power, accessibility, and automation. Real-time reporting, automated invoicing, and seamless bank reconciliation have transformed the field—allowing even non-accountants to manage finances efficiently from anywhere.

Accounting Today: Still Evolving

From clay tablets to cloud software, accounting has always adapted to the needs of the time. As businesses face new challenges such as globalization, digital commerce, and AI, accounting continues to evolve. But the core principles remain the same: accuracy, accountability, and insight.

Understanding the history of accounting gives us perspective on its importance. It’s not just a support function—it’s a critical part of how organizations operate, grow, and make smart decisions.

When managing your business finances, the tools you choose can make or break your operations. For many small businesses, accounting software is the go-to solution. But as you grow, you may find that accounting software no longer keeps up with your needs. That’s where ERP systems come in.

Let’s break down the difference between accounting software and ERP in plain terms—and help you understand when it’s time to make the switch.

What Is Accounting Software?

If you’re just starting out or running a small business, accounting software is likely your financial command center. It helps you manage your books by tracking expenses, sending invoices, and running payroll—all without needing a finance team or IT department.

That’s where AccountEdge comes in. It’s a robust, desktop-based accounting solution built specifically for small businesses that want professional-grade tools without enterprise-level overhead.

With AccountEdge, you can:

• Send professional invoices and get paid faster
• Reconcile your bank transactions quickly and accurately
• Handle payroll with confidence
• Track employee time for jobs or billing
• Run detailed financial reports for insights and planning

Best of all, it’s easy to set up and affordable. You don’t need weeks of training or complex onboarding. Most users can get started in a few hours, with an interface that’s intuitive and easy to navigate.

Whether you sell items, or are a service provider, consultant, retailer, or contractor, AccountEdge offers the structure and flexibility you need to stay financially organized and compliant, without overwhelming you with tools you won’t use.

What Is an ERP System?

While accounting software like AccountEdge handles your financial operations with ease, an ERP—short for Enterprise Resource Planning—takes things several steps further.

ERP is like the central nervous system of a growing business. Instead of using different tools to manage multi-channel sales, multi-location inventory, HR and hiring for dozens/hundreds, or thousands of staff, as well as purchasing and finance, an ERP platform ties everything together in a single, connected system.

Take Priority ERP, for example. It’s designed for companies that have outgrown spreadsheets, true small business accounting apps, or siloed software and need full visibility across departments, business segments or related companies.

With Priority ERP, businesses can manage:

• Financials and general ledger
• Supply chain and inventory
• Manufacturing and production
• Sales, CRM, and service
• HR

ERP systems like Priority are typically implemented with expert support. They’re not plug-and-play, but they are fully customizable to fit the way your business works—from industry-specific features to user-defined workflows and integrations.

Yes, ERP is a bigger investment—both in time and money. But for companies with complex needs or rapid growth, it delivers the real-time automation and workflow customization that accounting software alone can’t offer.

Side-by-Side Comparison: Accounting vs. ERP

When Do You Need Accounting Software vs. When Do You Need ERP?

Choosing between accounting software and an ERP system depends on your business size, complexity, and growth trajectory. Here’s how to tell which solution fits your needs:

When Accounting Software Is the Right Choice:

• You run a small or mid-sized business – Your operations are manageable with a few team members and straightforward workflows.
• You need robust financial tools without the IT overhead – You want to manage invoicing, payroll, reporting, and more, without hiring a full tech team.
• You value affordability and simplicity – AccountEdge offers enterprise-grade accounting at a price and complexity level that makes sense for growing businesses.
• You want a solution you can set up quickly – You can get started in hours or days, with no formal implementation required.

When It’s Time to Move to ERP:

• Your business is scaling quickly – You’re expanding to new locations, launching new product lines, or growing your team across departments.
• You rely on multiple disconnected systems – Managing inventory, CRM, HR, and finance across different platforms is slowing you down.
• You require tailored, industry-specific workflows – Manufacturing, logistics, or compliance-heavy industries often need ERP flexibility.
• You need global capabilities – Multi-currency, multi-language, and cross-border compliance are built into ERP platforms like Priority.
• You’re ready for automation and deeper insights – ERP brings real-time data and advanced reporting across your entire operation.

By understanding where your business sits today—and where you’re headed—you can make the right choice between streamlined accounting and full-scale ERP. 

Final Thoughts: AccountEdge or ERP?

The question isn’t which is better—it’s which is right for where you are now.

AccountEdge is ideal for small to mid-sized businesses looking for robust, affordable accounting tools without the overhead of a full ERP. It’s perfect for companies that want to stay in control without overcomplicating things.

If your operations grow beyond what accounting software can manage, ERP may be the logical next step. But until then, a powerful accounting solution like AccountEdge gives you everything you need—without the cost or complexity.