Accounting software is an application or suite of applications that records and processes accounting transactions in accordance with specified rules and regulations and brings each transactional entry to final books such as trial balance, profit and loss accounts and balance automatically. Accounting is part of life, it is required everywhere, be it at home, shop, services, companies or government departments. Books containing information on monetary transactions are required.
Accounting software makes it easy to keep your accounting books. This is done in a few ways, such as software that helps a layman keep his books who has no knowledge of accounting rules. The software helps small to large organizations keep the books with ease by processing and posting by itself and relieving the accounts department of repetitive work and another way is to help analyze account data to make better and profitable decisions and receive alerts for wrong decisions or cheats. .
Accounting software usually contains modules such as accounts receivable, accounts payable, general ledger, billing, inventory, purchase order, sales order, bank book, and cash book. These are core modules of accounting software; however, non-core modules may include more options such as outstanding or debt collection, payment performance, expenses, payroll, etc.
Accounting software can be classified based on its functionality into a few categories. Personal accounting software is designed for simple accounting purposes, such as managing budget, expenses, and income from personal accounts. This software also includes reports for reconciliation such as bank book and expense sheet. Inventory accounting software is another category of software used with call and put options, some of which also have stock options and use a single entry system for accounting. These software are very low in terms of functionality and only support one type of regulation and currency. This software is not designed with GAAP or IFRS compliance and only provides accounting as an add-on feature with the software.
Accounting software used by mid-tier companies has multiple currency and regulation options that allow the user to keep books according to international standards. The reporting of this software is robust and scalable through the use of external tools. This software uses scalable and flexible databases on the back end like Oracle, Pervasive, MS-SQL, MySql, etc. Management information systems are provided along with this software supported by capable reporting tools such as Crystal Reports or cognos.
ERP finance software are more advanced versions of accounting software used by mid-tier organizations. The advantage of using such software is that it can be customized according to the user’s needs and requirements while maintaining IFRS or GAAP compliance while maintaining accuracy and speed for vital analysis and information transfer. Large organizations may need to adopt some policies to work smoothly or cover pitfalls, this software adjusts accordingly to allow its users to work freely with the same flexibility. Some accounting software is designed specifically for a particular industry, solving industry-specific problems, and providing advanced features like security and data privacy. Such software is used by banks, financial institutions and government departments. This software is flexible enough to adjust to changing rules and regulations more easily.
