Accounting Software is an accounting information system that is use to monitor and manage the financial health of your business. It maintain a records of accounting transactions within functional modules such as accounts payable, accounts receivable, general ledger, payroll, journal and trial balance.
There are in-house software used by the organization or can be purchased from a third party. It also can be a combination of a third party application software package with some modifications done as per your requirement of the organization. Accounting software can be desktop based or also can be on-line based which can be accessed anywhere at any time with any device which is connected to Internet.
Modules of Accounting Software:
Usually, accounting software will have two modules. These include core modules and non-core modules. Again these modules will have different sections dealing with particular areas of accounting.
- Accounts receivable: The amount of money received by the company can be entered here.
- Accounts payable: The bills and the money it owes are entered here
- Billing: Here the invoices is generated for clients or customers
- Bookkeeping: The record of collection and payment of the company is kept here
- Stock/inventory: The control of company's inventory is kept here
- General ledger: It is the book of the company
- Purchase order: Inventory can be ordered here for the company
- Sales order: It keeps the record of customer orders for the supply of inventory
- Financial close management: Here, the account balances at the end of a designated time period is verified and adjusted by accounting teams
- Electronic payment: It allows the processing and acceptance of electronic payment for online transactions
- Debt collection: The overdue bills are collected here
- Expense: The business related expenses of employee are entered here
- Payroll: Tracking of salary, wages, and related taxes of each employee are done here
- Reports: Here the company prints out the required data or any information
- Inquiries: Important information can be looked up on screen without any edits or additions
- Time sheet: time worked is recorded by professionals so that it can be billed to clients
- Purchase requisition: Here the requests for purchase orders are made, approved and tracked
- Reconciliation: Records from parties at both sides of transactions can be compared here for consistency
- Journals: Records of both economic and non-economic transactions are kept here
- Drill down: It holds various operations and transformations on tabular form
- Departmental accounting: Accounting details are kept here in terms of different departments such as product, customer, functional etc
- Support for value added taxation: support for GST related issues can be solved here
- Late payment reminders: Alert or reminders for late payment can be seen here
Types of accounting software:
There are many different types of accounting software are available on the mark that suit different business sizes, industries, sectors and even work processes.
Free accounting software:
Free accounting software can be used for small business as it comes with limitations such as, disruptive advertising or locked access to advanced features.
Small business accounting software:
Small business accounting software are made of simple programs and are easy to use. These are available for desktop as well as over the internet.
Usually these software provides all the basic features like payroll, invoicing, reporting and more. They may be providing more functionality for additional fees.
Enterprise accounting software:
Enterprise accounting software allows an organization to track their financial transactions and manage it. These are more expensive as it generally comes with package of programmes and offer all the standard financial tools and reporting system.
The common features include billing, purchasing, supply chain software, reconciliation, customer relationship management and inventory control.
Online accounting software:
Both free and paid accounting software can be hosted online or on remote servers in the cloud. These have accounting capabilities similar to Software as a Service (SaaS) business model. Online accounting software are popular because of its flexibility and cost benefits. There is no need to to install and maintain software on your premises. These can be can be accessed anywhere at any time with any device which is connected to Internet. However, online accounting software systems have some risks. This include, reliance on internet access and connectivity, portability of your data and data protection.