Accounting software: Types and Classifications

Gone are those days, when CPAs, accountants and entrepreneurs were required to deal with manual accounting process. this was really time taking and also resulted in different types of errors, thus costing the business a lot. The introduction of accounting software systems, both online and offline seems to have provided an excellent solution to businesses of all types.

About accounting software

It is regarded to be an application set to record as well as process different types of accounting transactions keeping in accordance with the specified rules and regulation. It also takes each and every single transaction entry right to the final books, such as balance sheet, profit & loss accounts and trial balance automatically. Correct and accurate maintenance of accounts is considered to be necessary for every business for its success and growth, irrespective of its size, domain and geographical location. using the gst softwares can help complicated bookkeeping procedures to seem easy and effortless.

Benefits of using accounting software

With the right accounting software being implemented in the business, the task of maintaining books of accounts has become easy and quick. Using the software system, even the layman can maintain his books properly, without actually requiring much knowledge about accounting rules and regulations. There are available different types of accounting software systems that has been helping small and large organizations to maintain their books. It records and processes on its own, thus providing immense relief to the accountants from carrying out repetitive work. It also helps them to analyze accounts data to take profitable and better decisions. It also alerts them from pitfalls and wrong decisions.

Modules present

Generally, the accounting software comprises of different types of modules such as accounts payable, accounts receivables, billing, general ledger, purchase order, inventory, bank book, cash book and sales order. they are accounting software system’s core module. However, non-core modules might also include much more options such as outstanding or debt collection, payroll, expenses, payment performances, etc.

Classification

It is according to their functionality in several categories that it is classified.

  • Personal accenting software: It is used to carry out simple accounting procedure like income and expenses and managing budget for personal accounts. Such software may include reports for the purpose of reconciliation such as expense sheet and bank book.
  • Inventory accounting software: It is used with purchase and sales options. Some also come with stock options, using single entry system. They support just single currency and regulation type and low with respect to functionality. Such software is not designed with IFRS or GAAP compliance and offers accounting simply as an additional feature along with the software.
  • Mid-level companies having multiple regulation and currency options do use accounting software. It allows users to maintain books according to the international standards. Software reporting of this type is scalable, using external tools and also robust. They have flexible database at their back-end such as Pervasive, Oracle, MySql, MS-SQL, etc.

Doing some research can help the person to get to know about the different types of accounting software introduced in the market and for carrying out online gst return filing on time.