What is Accounting Software
Accounting software is a computer program that assists bookkeepers and accountants in recording and reporting a firm's financial transactions. The functionality of accounting software differs from product to product. Larger firms may choose to implement a customized solution that integrates a vast amount of data from many different departments. Small firms often choose an off-the-shelf product.
BREAKING DOWN Accounting Software
Accounting software is an invaluable resource for modern business. Software allows detailed tracking of financial transactions and near instantaneous reporting and analysis. Before accounting software, these tasks had to be performed by hand, using large transaction journals. Ad hoc reporting was generally impractical due to the labor involved to consolidate the manual entries. Accounting software automates these tasks, reducing the costs of accounting and allowing better financial decision-making through timely reporting.
An Abundance of Accounting Software Choices
There are accounting software packages for all companies, from Intuit's Quickbooks for small to midsize businesses to offerings from Microsoft, SAP and Oracle for large enterprises. Some of the distinguishing features are functionalities in expense reporting, LIFO and FIFO inventory reporting, point-of-sale integration, batch management, document management and multicurrency transaction recording. Also important is where or how the accounting software is deployed - on-premises, hosted as software-as-a-service (SaaS), or in the cloud. There are generic accounting software packages that can be used right away for all types of companies, while other packages require customization for the specific needs of an industry or business. As with other types of software packages, pricing for accounting software can take the form of flat-rate (e.g., monthly subscription), time-based, per user-based, tiered-rates depending on level of service, etc.