Accounting software is computer 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 company or organization using it, may be purchased from a third party, or may be a combination of a third-party application software package with local modifications. It varies greatly in its complexity 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.
Accounting software is typically composed of various modules, different sections dealing with particular areas of accounting. Among the most common are: Accounts payable—where the company enters its bills and pays money it owes Accounts receivable—where the company enters money received Billing—where the company produces invoices to clients/customers Collections—where the company tracks attempts to collect overdue bills (sometimes part of accounts receivable) Expense—where employee business-related expenses are entered General ledger—the company's "books" Inquiries—where the company looks up information on screen without any edits or additions Payroll—where the company tracks salary, wages, and related taxes Reports—where the company 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)
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:
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 offer 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 have considerable functionality but are not considered GAAP or 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 or ERP software.
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 having 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 have little understanding of the underlying transactions the package is recording.
These developments have 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 have a Systems Accountant overseeing the accountancy system becomes 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.