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.

RELATED TERMS
  1. Trading Software

    Trading software facilitates the trading and analysis of financial ...
  2. Forex Forecasting Software

    Forex forecasting software is a tool which helps currency traders ...
  3. Account Activity

    Account activity generically applies to whenever a movement of ...
  4. Cloud Computing

    Cloud computing is a model for delivering information technology ...
  5. Accounting Policies

    Accounting policies are the specific principles and procedures ...
  6. Closed Account

    A closed account is any account that has been closed out or otherwise ...
Related Articles
  1. Small Business

    Top 10 Hidden Factors Affecting Software Stocks

    Want to invest in software? Here are the most important factors affecting profits, revenues, and stock price of software companies
  2. Investing

    Best Record Keeping Software Products for Your Business

    Discover the importance of bookkeeping for your business and three of the best bookkeeping software options for your small business.
  3. Taxes

    Key Steps In Choosing The Best Tax Preparation Software

    U.S. taxpayers left over $1 billion on the table in missed tax deductions in 2013. Would using tax software prevent you from contributing to this unclaimed cash?
  4. Tech

    7 Popular Software Programs for Portfolio Managers

    For retail investors and money managers, portfolio management software makes life easier. Here are synopses of seven popular programs.
  5. Investing

    The 5 Biggest Chinese Software Companies (CHL, TCEHY)

    Read about the five largest and most influential software companies in China, including a new up and coming superstar.
  6. Trading

    Picking the right algorithmic trading software

    Want to enter the tech-savvy world of algorithmic trading? Here are some tips to picking the right algorithmic trading software.
  7. Personal Finance

    Find The Best Personal Finance Software

    Should you pay for personal finance software or get it free? The best program for you depends on your needs and how private you want to be about money.
  8. Taxes

    Tax Software Vs. An Accountant: Which Is Right For You?

    We look at the pros and cons of using tax software versus an accountant when filing your tax return.
  9. Tech

    The Top 5 Large-Cap Software Stocks for 2016

    Discover the top five large-cap software stocks for 2016, with a summary of each company and what will make the stock appreciate in the upcoming year.
  10. Investing

    How to use Excel as a general accounting ledger

    Follow these steps to set up a general ledger accounting system in Excel. A small business can use Excel as a substitute for expensive accounting software.
RELATED FAQS
  1. What are some of the better types of financial analysis software?

    Discover what features make for good financial analysis software, some popular options and why analysts need to pick the ... Read Answer >>
  2. What is accrual accounting in SAP?

    See how accrual accounting practices are handled through the Statutory Accounting Principles and the Systems, Applications ... Read Answer >>
  3. What is the best cash flow management tool?

    Understand the basics of cash flow management and which tools are most useful, both those included in financial software ... Read Answer >>
  4. What are the differences between a change in accounting principle and a change in ...

    Learn how to differentiate between a change in accounting principle and a change in accounting estimate and how accountants ... Read Answer >>
  5. What's the difference between the general ledger and a general journal?

    Keeping records for most organizations require a double-entry bookkeeping system, which revolves around transactions in the ... Read Answer >>
Trading Center