Accounting Software is a type of an Application Software which stores & processes all accounting transactions within the functional module such as accounts payable, accounts receivable, journal, general ledger, payroll, and trial balance. It functions as an accounting information system because it provides all the information related to an account and its transactions.
By utilizing a well-designed & well-functioning Invoicing Software, many businesses can cut their cost & create their savings by increasing the efficiency with which incoming cash flows and payments, outgoing bill payments and liabilities, and payroll are handled. This makes easy for businesses to trust & rely on Accounting Software for their own use.
Accounting Software helps reduce expenses and report accurately on financial activities, and improves the quality of accounting decisions. It can be used locally, or in cloud, depending on how do you want to manage or control your own updates and security.
In South Africa, Turbo Cash launched in 1987 with an automated system for trial balance, balance sheet and income statement. But it could not solve many problems. In 1990, Turbo Cash began being distributed by Pastel. It was effectively the same system. This product evolved in South Africa and has 80% of the local accounting software market. Pastel has upgraded continuously and added in functions for customer invoicing, supplier management and inventory. Ever since then, the market has been undergoing considering using Accounting Software.
Accounting Software are of two types – Desktop & Online.
- Desktop – Many small business owners use Desktop Accounting Software because it is popular & it was more powerful because an owner had to pay money only one time. It doesn’t need to have an internet connection for working. That’s why owners can use it without worrying about internet connectivity.But using it in large amount of data, it causes a problem to keep all of the financial information in one single place. If we are not in place where the computer is then we can’t use Accounting Software. Also if the software is need to be updated or repaired then it is difficult to share files between computer.
- Online –Cloud software, called as Software-as-a-service, is more flexible with new features. Most cloud software run on a subscription basis up to the time when we need it. Cloud accounting software has an advantage of automation which it can connect bank accounts & it reduces the amount of manual data entry, errors & mix-up of data. It generates backup & updates which increases security of data. Owner can log into account from anywhere with the help of internet.
Key Features & Need of Accounting Software
- Core accounting
- Billing & Invoicing
- Budget & Forecasting
- Fixed asset
- Payroll system
- Project accounting
- Fund accounting
- Inventory management
Advantages of Accounting Software
- Improved productivity
- Resource Transparency
- Automatic Production of Documents
- Smarter Strategies
- Reporting and analysis
- Simple data entry
- Fast processes
- Reduction of errors
- Integration with other systems
- Automation of tasks
Disadvantages of Accounting Software
- Price is higher than Paper based systems
- Need to Learn Working of Software
- Implementation fees is charged for setting up software
- Need to maintain the software and its data
- Change in software is difficult & may need extra charges
- Dealing with technical issues is difficult
Accounting software’s have developed accounting in all over the world & business owners are still moving from bookkeeping systems to accounting software. Its processes have been made easier and less costly. But, the systems have disadvantages such as loss of jobs to most of the accountants. The advantages which are brought by the packages are more both to small business owners and big organizations. It is the role of every organization to keep working with the changing technology for the development & to compete in the market.