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Accounting Software Classification
Accounting software is an application to record and analyze the operations related to accounts. The transactions are entered as per the accounting guidelines, and take every entry to the finalization of accounts like the trial balance, profit and loss account, and balance sheet.
Advantages of accounting software
The primary advantage of this application is the simplification of the entire process of keeping accounts. Moreover, it is beneficial for those individuals who do not understand the rules of accounting. The software reduces the efforts of the accounting department employees, as they are not required to repeat their work. In addition, the accounting software analyzes the inputted information better and enables management to take beneficial decisions. Moreover, the software provides warning signals in case managers are making incorrect decisions. The common modules included in the software are debtors, creditors, ledger, billing, inventory management, purchase and sales order book, and bank and cashbooks.
Classification of accounting software
Based on the functionality offered, there are several categories of this application. Individuals can use personal accounting software to maintain their budgets, income, and expenditures. Based on the single entry accounting system, inventory management software enable companies to keep a track of their purchase and sales order books. Generally, these applications are at the lower end of the spectrum and support entries in a single currency and generally do not comply with GAAP or IFRS regulations. Some of such software programs may provide accounts keeping as an additional feature of the application.
Higher end accounting software
Mid-level accounting software enables making entries in different currencies and complies with the regulations of the various authorities, which enables companies to manage their accounts as per international standards. The database of such software is robust and built using programs, such as Oracle, MS-SQL, MySql, and Pervasive. Several reports using crystal reports and cognos are available to assist management in their decision-making. Enterprise Resource Planning is the highest end of the accounting software spectrum. The biggest advantage of an ERP is the flexibility, which is possible because the application is customizable as per user specific requirements without compromising on the quality of the application. Some accounting software applications are designed to meet the specific requirements of an industry, such as banks, financial institutions, stock exchanges, and government organizations. These applications are developed as per the specific guidelines of such organizations and are easily customizable to meet the changes in the rules and regulations governing the industries.
Issue : Development, Open, System |
