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Concept
Accounting software
Summary
Accounting software is a computer program that maintains account books on computers, including recording transactions and account balances. It may depends on virtual thinking. Depending on the purpose, the software can manage budgets, perform accounting tasks for multiple currencies, perform payroll and customer relationship management, and prepare financial reporting. The first accounting software was introduced in 1978. Since then, the accounting software has revolutionized from supporting basic accounting operations to performing real-time accounting and supporting financial processing and reporting. Cloud accounting software was first introduced in 2011, and it allowed to perform all accounting functions through the internet.
Accounting software is typically composed of various modules, with different sections dealing with particular areas of accounting. Among the most common are:
Core modules
Accounts receivable—where the company enters money received
Accounts payable—where the company enters its bills and pays money it owes
General ledger—the company's "books"
Billing—where the company produces invoices to clients/customers
Stock/inventory—where the company keeps control of its inventory
Purchase order—where the company orders inventory
Sales order—where the company records customer orders for the supply of inventory
Bookkeeping—where the company records collection and payment
Financial close management — where accounting teams verify and adjust account balances at the end of a designated time period
Non-core modules
Debt collection—where the company tracks attempts to collect overdue bills (sometimes part of accounts receivable)
Electronic payment processing
Expense—where employee business-related expenses are entered
Inquiries—where the company looks up information on screen without any edits or additions
Payroll—where the company tracks salary, wages, and related taxes
Reports—where the company prints out data
Timesheet—where professionals (such as attorneys and consultants) record time worked so that it can be billed to clients
Purchase requisition—where requests for purchase orders are made, approved and tracked
Reconciliation—compares records from parties at both sides of transactions for consistency
Drill down
Journals
Departmental accounting
Support for value added taxation
Calculation of statutory holdback
Late payment reminders
Bank feed integration
Document attachment system
Document/Journal approval system
Note that vendors may use differing names for these modules.
Official source
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Related publications (19)
Related concepts (4)
Accounts receivable
Accounts receivable, abbreviated as AR or A/R, are legally enforceable claims for payment held by a business for goods supplied or services rendered that customers have ordered but not paid for. The accounts receivable process involves customer onboarding, invoicing, collections, deductions, exception management, and finally, cash posting after the payment is collected. These are generally in the form of invoices raised by a business and delivered to the customer for payment within an agreed time frame.
Bookkeeping
Bookkeeping is the recording of financial transactions, and is part of the process of accounting in business and other organizations. It involves preparing source documents for all transactions, operations, and other events of a business. Transactions include purchases, sales, receipts and payments by an individual person or an organization/corporation. There are several standard methods of bookkeeping, including the single-entry and double-entry bookkeeping systems.
Enterprise software
Enterprise software, also known as enterprise application software (EAS), is computer software used to satisfy the needs of an organization rather than individual users. Such organizations include businesses, schools, interest-based user groups, clubs, charities, and governments. Enterprise software is an integral part of a computer-based information system. Enterprise software handles a number of operations in an organization, for example to enhance the business and management reporting tasks, or support production operations and back-office.