Accounting Software

Accounting software is a system that captures, records, tracks, and processes business financial activities and transactions across a series of modules including:

• Accounts Payable
• Accounts Receivable
• General Ledger
• Payroll
• Trial Balances
• Income & Expense Statements
• Tax Calculation and Filing

Accounting software is used financial teams, individuals, or contractors to track, process, and report on financial processes such as invoicing, accounts payable and receivable, tax calculation & compliance, general ledger, income & expenses, payroll, and cash flow reporting & analytics. 

The main types of accounting software include:

• Payroll Processing & Management
• Billing & Invoicing
• Accounts Receivable and Accounts Payable
• Tax & Compliance
• ERP software 

Microsoft Office Excel can be used to calculate certain accounting functions such as balance sheets, budgets, and statements, but the function of Excel is more for organizing data and performing calculations than for performing financial transactions and activities necessary to run a business. 

The most common accounting software features include:

• Invoicing and billing
• Accounts payable
• Accounts receivable
• Income & Expense Reporting
• Payroll management
• Tax calculation, compliance, & filing
• Stock and inventory management
• Sales and purchase orders
• General ledger
• Financial reporting & analytics

The benefits of using accounting software include:

• Time and Cost Savings
• Instant access to financial tools and reporting
• Consolidated, synced financial data across all aspects of an organization
• Data accuracy, privacy, and security
• Simplified accounting processes such as invoicing, billing, and payroll
• Business insights via in-depth and real-time reporting
• Streamlined financial processes

Accounting software is often used by companies, individual accountants, consultants, business analysts, CFOs, auditors, and tax agencies to prepare financial reports, process payroll, and remit taxes. 

The main types of accounting systems are cash-based accounting and accrual based accounting. Accounting software can be customized to the accounting method(s) used in an organization to provide all the tools needed. 

While accounting software can provide companies with many advantages, there are some drawbacks to be aware of and plan for, including:

• Data Loss and Service Interruptions
• Incorrect Data or Financial Information
• Costs
• Security and Privacy
• System Integrations

Accounting software is most beneficial for small, growing companies and large corporations as well. Any company that is quickly growing and adding more customers and employees can save time and money by buying and implementing accounting software to automate and manage key financial and reporting activities in the business. 

Accounting software is available in a wide range of pricing plans, which can start at less than $10 a month per user. Depending on the complexity and size of the business, a more robust accounting software may be needed which can drive the price up to anywhere between $300 - $999 per user each month, plus annual licensing fees.

The top accounting trends include:

• Increased business adoption of accounting software systems (particularly cloud-based accounting software)
• Innovations in accounting system automations and functionality
• Increase in professional accountants using software to become consultants and take on more clients
• Integration of social media into accounting processes for sales, invoicing, and billing