Accounting Software and Accounting System
Accounting software is computer software that records and processes accounting transactions within functional modules such as accounts payable, accounts receivable, payroll and trial balance. It functions as an accounting information system and may be developed in-house or it can be purchased from a third party as an 'off-the-shelf' accounting package (i.e. Sage Line 50, QuickBooks etc) or it can be one of the functional modules available in a larger system such as ERP. Increasingly accounting packages / modules are modified to suit the company they are to be used by.
Since the mid 1990s, the market has been undergoing considerable consolidation, with many suppliers ceasing to trade or being bought by larger groups. Accounting software is typically composed of various modules, different sections dealing with particular areas of accounting. Among the most common are:
- 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 Orders - where the company orders inventory
- Sales Orders - where the company records customer order for the supply of inventory
- Debt Collection - where the company tracks attempts to collect overdue bills (sometimes part of accounts receivable)
- 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 consultants, accountants etc) record time worked so that it can be billed to clients
