What is Accounting Software?

Accounting software is a type of software that accounting professionals or business owners use to process accounting transactions and manage accounts. The accounting software is usually created by a third party for small and medium-sized businesses, although large businesses and corporations have their own in-house accounting software.

More and more, accounting software is on-line based, or with many on-line features. The range of accounting software is anywhere from simple and user-friendly to complex which requires training and experience.

The cost range is also wide, with SaaS (Software as a Service) subscriptions offering low-priced, limited versions of the software for cheap. Corporation versions of the software will be much more expensive.

All accounting software has different sections - modules - that deal with specific parts of the accounting process.

The core modules are:

• accounts receivable, for all money the business receives
• accounts payable, for all money the business owes
• general ledger, which is the company's records ("books")
• billing/invoicing, for all invoicing to the business' customers
• inventory/stock, for all the company's inventory
• purchase order, for all the inventory orders
• sales order, for all the orders received by customers
• bookkeeping, for the business records payments and collections

There are other modules in different accounting software that are added on as needed. They include:

• debt collection, for tracking and collecting unpaid invoices
• electronic payment processing
• expense, for entering employee business-related expenses
• payroll, for tracking employee salary and related taxes
• reports, for printing out financial data on various parts of the business
• purchase requisition, for purchases order requests, approvals and tracking