What is Accounting software
Accounting software describes a type of applicationsoftware that records and processes accounting transactionswithin functional modules such as accounts payable, accountsreceivable, payroll, and trial balance. It functions as an accounting information system. It may be developed in-house by the organization using it, may be purchased from a third party, or may be a combination of a third-party applicationsoftware package with local modifications. Accounting software may be on-line based, accessed anywhere at any time with any device which is Internet enabled, or may be desktop based. It varies greatly in its complexity and cost.
The market has been undergoing considerable consolidationsince the mid-1990s, with many suppliers ceasing to trade orbeing bought by larger groups.
Accounting software Type
Personal accounting software is mainly targeted towards homeusers, supporting accounts payable-type accounting transactions, managing budgets, and simple account reconciliation, at the inexpensive end of the market.
At the low-end of the business markets, inexpensive applications software allows most general business accountingfunctions to be performed. Suppliers frequently serve a single national market, while larger suppliers offer separatesolutions in each national market.Many of the low endproducts are characterized by being "single-entry" products,as opposed to double-entry systems seen in many businesses.Some products have considerable functionality but are not considered GAAP or IFRS/FASB compliant. Some low-end systems do not have adequate security nor audit trails.
The mid-market covers a wide range of business software that may be capable of serving the needs of multiple national accountancy standards and allow accounting in multiple currencies.In addition to general accounting functions, the software may include integrated or add-on management information systems, and may be oriented towards one or more markets, for example with integrated or add-on project accounting modules.
The most complex and expensive business accounting software is frequently part of an extensive suite of software often known as enterprise resource planning (ERP) software.These applications typically have a very long implementation period, often greater than six months. In many cases, these applications are simply a set of functions which require significant integration, configuration and customization to even begin to resemble an accounting system.The advantage of a high-end solution is that these systems are designed to support individual company specific processes, as they are highly customizable and can be tailored to exact business requirements. This usually comes at a significant cost in terms of money and implementation time.