In Substation Automation Systems, application functions such as monitoring, control, and protection are deployed in intelligent electronic devices (IEDs). Before the IEDs are installed in the substation, functions are tested by the manufactures to ensure that the functions operate properly as designed. A conventional function test platform is made of amplifiers with copper wire connection to the IEDs. It has drawbacks such as high cost, limited flexibility, and limited number of signal channels. With the introduction of the IEC61850 standard, IEDs are able to obtain measurement from merging units (MU) via the process bus. Consequently, using MUs to replace the amplifier for IED function testing has been studied by several research groups. All of them use hardware MUs or power system simulator embedded MUs. These MUs based test platforms have weakness such as limitation of the number of MUs and lower flexibility in MU performance modification, This paper proposes a novel IED functional test platform using software MU (sMU), which mitigates the above limitations. Thanks to the software approach, different MU performance scenarios can be easily configured instead of using a complicated communications simulator. The sMU based test platform concept has been proved by performing accuracy and operate-time tests with transformer differential protection. Comparing with conventional test platform, sMU based test platform has better results in the accuracy tests and similar performance in the operate-time tests. Therefore, it is feasible to use sMU based platform for IED functional tests.