| Accounting Software |
| Written by Jason P. Hartz | |
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Accounting software is obviously used for accounting functions such as recording, processing of accounting transactions through the use of modules like accounts receivable, accounts payable, trial balance and payroll. In other words, it also functions as an information system specific to accounting. This type of software can be developed by in-house programmers, can be bought from a third party software vendor or can be a combination of both, third-party accounting software package that has been modified by the company’s programmers. The complexity as well as the costs of each varies from accounting software to another. The market for accounting software has gone through much consolidation since the 90s with some of its suppliers ceasing operations or may have been acquired by bigger companies. Time and again there are many cases the show implementation as a bigger contributor in business costs than the choosing the actual software itself. Resellers, developers or consultants are the ones who commonly and exclusively market most of the midmarket and larger accounting softwares or applications. These organizations pay a license fee to the software vendor and then the client in turn pays them for the installation, customization services as well as for support. Clients pay 50-200% in implementation of the software compared with the price of the accounting software. On the other hand other companies sell, consult and support clients directly without the reseller. There are different levels of business markets for the accounting software. At the lower end of these markets include cheaper accounting applications software that can perform most basic accounting functions. Smaller suppliers often focus on just one market while bigger suppliers can provide distinct solutions for markets ranging from the lower end, mid market to the high end. Most of these low end accounting software are single-entry products which is different to the double-entry systems that are used in other businesses. Low end accounting products are not GAAP or FASB compliant nor do these have strong security as well as audit trails although these have some accounting functionality. Meanwhile the mid-market has a wide array of business applications software which can meet the needs of several accountancy standards and can be used for accounting in different or multiple currencies. Aside from the general accounting features, the accounting software can include integrated management information systems and may cater to different, various markets such as the case of add-on or integrated project accounting modules. On one hand, the high end solutions are systems which are designed to provide support for the different companies’ specific processes. These can be modified and be customized to meet the exact business needs. These high end solutions are not only expensive but require extensive implementation time. An example of these high end solutions is the ERP or Enterprise Resource Planning software. Considered as the most sophisticated , expensive and complex suite of accounting software, the ERP has a long implementation stage usually more than six months and on most cases these applications are a group of functions that needs much configuration, integration and customization in house or through a supplier for the ERP to start looking like a true accounting system. |