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Accounting software
Accounting software is puter software that records and processes accounting transactions within functional modules such as accounts payable, accounts receivable, payroll and trial balance. It functions as an accounting information system. It may be developed in-house by the pany or anization using it, may be purchased from a third party, or may be a bination of a third-party application software package with local modifications. It varies greatly in its plexity and cost.
Since the mid 1990s, the market has been undergoing considerable consolidation, with many suppliers ceasing to trade or being bought by larger groups, notably by Sage and Microsoft.
Modules
Accounting software is typically posed of various modules, different sections dealing with particular areas of accounting. Among the most mon are: Accounts payable—where the pany enters its bills and pays money it owes Accounts receivable—where the pany enters money received Billing—where the pany produces invoices to clients/customers Collections—where the pany tracks attempts to collect overdue bills (sometimes part of accounts receivable) Expense—where employee business-related expenses are entered General ledger—the pany's "books" Inquiries—where the pany looks up information on screen without any edits or additions Payroll—where the pany tracks salary, wages, and related taxes Reports—where the pany prints out data Timesheet—where professionals (such as attorneys and consultants) record time worked so that it can be billed to clients
(Different vendors will use different names for these modules)
Categories
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Personal Accounting
Mainly for home users that use accounts payable type accounting transactions, managing budgets and simple account reconciliation at the inexpensive end of the market suppliers include:
Low End
At the low end of the business markets, inexpensive applications software allows most general business accounting functions to be performed. Suppliers frequently serve a single national market, while larger suppliers of
fer separate solutions in each national market.
Many of the low end products are characterized by being "single-entry" products, as opposed to double-entry systems seen in many businesses. Some products he considerable functionality but are not considered GAAP or FASB pliant. Some low-end systems do not he adequate security nor audit trails.
Mid Market
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.
High End
The most plex and expensive business accounting software is frequently part of an extensive suite of software often known as Enterprise resource planning or ERP software.
Vertical Market
Some business accounting software is designed for specific business types. It will include features that are specific to that industry.
Use by Non Accountants
With the increasing dominance of hing financial accounts prepared with Accounting Software, as well as some suppliers claims that anyone can prepare their own books. An area of concern going forward is that of non-accountants producing what they believe to be accurate statutory financial records when the reality may be that they he little understanding of the underlying transactions the package is recording.
These developments he led to an added importance in the role of Systems Accountants. They look at the integrity of the reporting process of the automated accountancy systems and software. As the basic recording and interpretation is left to software and expert systems, the necessity to he a Systems Accountant overseeing the accountancy system bees ever more important. The set up of the processes and the end result must be vigorously checked and maintained on a regular basis. In order to develop and maintain the integrity of the data and the processes that manage this data.
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