Accounting software is application software that records and processes accounting transactions. Accounting software usually includes functional modules such as accounts payable, accounts receivable, payroll, and trial balance. Accounting software may also include modules for general ledger, billing, stock or inventory, and sales and purchase orders. Additional accounting software modules may include debt collection, electronic payment processing, expenses, inquiries, reports, timesheets, and requests for purchase orders.
Accounting software functions as an accounting information system. Accounting software varies greatly in its complexity and cost. Low end accounting software allows most business accounting functions to be performed. Mid-level accounting software often is capable of meeting multiple national accounting standards and dealing with multiple currencies. High-end accounting software often has additional capabilities that lend themselves to managing the entire enterprise, which are sometimes referred to as ERP or Enterprise Resource Planning software.
Additionally, there are a number of specialized accounting software packages that are designed to meet the needs of vertical markets. These accounting software packages may include banking accounting software, construction account software, medical accounting software, nonprofit accounting software, oil and gas accounting software, and more.
There is a large variety of accounting software packages available today. Some accounting software is available for free; other accounting software costs hundreds of thousands of dollars. Some accounting software runs on desktop workstations, while other accounting software runs on much larger computer systems. Other accounting software systems are hosted online.
Selecting Accounting Software
One of the most important considerations in selecting accounting software is that it accurately fits the nature and the processes of the business that will be employing. In addition, the accounting software selection process should also consider the anticipated needs of the enterprise in the future, so that the system can be expanded to handle new challenges when needed. Some accounting software vendors offer a continuum of accounting software, so that it can be smoothly upgraded as the needs and requirements of the enterprise change as it expands, acquires subsidiaries, or expands with a global reach.