ACCOUNTING SOFTWARE
What is Accounting Software?
Accounting software is a computer program that assists bookkeepers and accountants in recording and reporting a firm's financial transactions.
Accounting
Software records and processes accounting transactions and serves as an
accounting information system from which decision makers or company accountants
can monitor business processes and generate financial reports.
Accounting software can also be describes
a type of application software that records and processes accounting transactions within functional modules such
as accounts payable, accounts receivable, journal, general
ledger, payroll, and trial
balance.
TYPES OF ACCOUNTING SOFTWARE
1. Commercial off-the-shelf (COTS) software
Commercial off-the-shelf (COTS) software
is the predominant accounting software used throughout the world. It is
moderately configurable to the needs of a business, contains multiple layers of
error detection to prevent the entry of incorrect information, and produces
standard reports that can usually be configured to the needs of the user.
Examples are:
·
Quickbooks,
·
Sage 50,
·
FreshbBooks, etc.
2.
Enterprise Resource
Planning Software (ERP)
ERP
software integrates information from all parts of a business into a single
database. This approach eliminates the problems associated with having
independent department-specific software that does not share information.
However, it is also painfully expensive and may require more than a year to
install. This software is usually only needed by the largest and most complex
organizations. Examples include:
o
SAP ERP,
o
NetSuite ERP,
etc.
3. Custom Accounting Software
This software is custom
developed for an organization. This approach is usually only taken when an
entity's needs are so specific that they cannot be met by a COTS or ERP
package. However, this approach is rarely taken, since custom software tends to
be buggy and requires more maintenance than commercially-available packages.
4. Cloud Accounting Software
Cloud Accounting Software are programs that are available online and are accessible
through the cloud. They include:
o Quickbooks Online,
o Sage 50cloud, etc
