Accounting Software
Accounting software digitally organizes financial records and transactions conveniently in one place. It handles billing, paying vendors, tracking income/expenses, and payroll electronically. Things stay organized in categories like accounts receivable/payable and payroll. It generates invoices, tracks who owes money, pays employees, keeps records, and creates financial reports. This digital assistant handles accounting behind the scenes so business owners save time versus paperwork.
9 Best Accounting Software for Small Business of 2023
- NetSuite
- Oracle Fusion Cloud ERP
- DataSnipper
- myBillBook
- QuickBooks Desktop Enterprise
- FreshBooks
- TaxDome
- Xero
- SAP Concur
List of Accounting Softwares with Reviews
12,558 Companies | Last Updated on: February 25, 2024
NetSuite 
Top Services: Web Design WordPress Website Design Shopify
1998
- Accounts Payable
- Income & Balance Sheet
- Workflow Management
- Fund Accounting
- Billing & Invoicing
- Payroll Management
Oracle Fusion Cloud ERP
Top Services: Web Design WordPress Website Design Shopify
2006
- For Government
- General Ledger
- Income & Balance Sheet
- Expense Tracking
- Bank Reconciliation
- Payroll Management
DataSnipper
Top Services: Web Design WordPress Website Design Shopify
2013
- Inventory Management
- Expense Tracking
- Accounts Receivable
- Fund Accounting
- Billing & Invoicing
- Multi-Currency
myBillBook
Top Services: Web Design WordPress Website Design Shopify
2013
- Tax Management
- General Ledger
- Workflow Management
- Asset Management
- Financial Reporting
- Payroll Management
QuickBooks Desktop Enterprise
Top Services: Web Design WordPress Website Design Shopify
1983
- For Government
- General Ledger
- Accounts Receivable
- Billing & Invoicing
- Workflow Management
- Income & Balance Sheet
FreshBooks
Top Services: Web Design WordPress Website Design Shopify
2003
- Inventory Management
- Accounts Receivable
- Multi-Currency
- Fund Accounting
- Financial Reporting
- General Ledger
TaxDome
Top Services: Web Design WordPress Website Design Shopify
2015
- Accounts Payable
- Tax Management
- Billing & Invoicing
- Project Accounting
- Payroll Management
- General Ledger
Xero
Top Services: Web Design WordPress Website Design Shopify
2006
- For Government
- Multi-Currency
- Expense Tracking
- General Ledger
- Fund Accounting
- Financial Reporting
SAP Concur
Top Services: Web Design WordPress Website Design Shopify
1993
- For Government
- Billing & Invoicing
- Billing & Invoicing
- Workflow Management
- Tax Management
- Payroll Management
What is Accounting Software?
Accounting software records and processes accounting transactions within functional modules such as accounts payable, accounts receivable, payroll, & and trial balance. Business owners can manage finances and generate important reports like balance sheets and income statements.
Accounting software offers a wide range of features to large/small businesses and accountants. Invoice and billing management is the key function of it. It allows users to efficiently generate and track invoices, bills, and payments. Some advanced accounting software also features integrations with payment gateways for seamless online or automated payment collection.
Accounting Software Features, Benefits and Limitations
Features of Accounting Software
- Invoicing and Billing: Generate invoices, bills and track payments. Integrate with payment gateways.
- Accounts Receivable and Payable: Record customer invoices and track amounts receivable. Record vendor bills and track payables.
- Bookkeeping: Automated bookkeeping with features like general ledger, chart of accounts etc. Record transactions across accounts.
- Financial Reporting: Automatically generate key reports like balance sheet, income statement, cash flow statement etc.
- Bank and credit card integration: Sync bank accounts and credit cards to record transactions.
- Purchase tracking: Record purchase details, bills and track expenses.
- Sales Tax Collection and Filing: Calculate and file sales tax returns.
- Tax Filing Integration: Integrate with tax services for electronic filing of income, VAT/GST tax returns.
- Project Accounting: Track financials by projects for profit estimation.
- Budgeting: Create, track and analyze budgets against actuals for better planning.
- Expense management: Record and categorize expenses with attachments.
- Audit trail: Maintain audit log of all transactions for compliance.
- Multiple User Access: Allow collaborative access to accounting data.
- Customizable Reports: Generate customized reports as per needs.
- Inventory Management: For businesses dealing with inventory.
Benefits of Accounting Software
- Accuracy: Reduces errors and increases accuracy by automating bookkeeping tasks.
- Time-saving: Saves huge time by automating repetitive accounting tasks like data entry.
- Efficiency: Streamlines accounting workflows and allows real-time access to financial data.
- Insights: Provides real-time insights into cash flows, expenditures etc. through automated reports.
- Compliance: Integrates with tax filing services to easily comply with statutory requirements.
- Collaboration: Enables secure remote access and data sharing between accountants and teams.
- Cost-Saving: More affordable than hiring full-time accounting staff for bookkeeping tasks.
- Audit Trail: Maintains audit log of all financial transactions for compliance and oversight.
- Scalability: Can scale well with business growth and increasing volume of transactions.
- Standardization: Ensures consistent financial processes and standard chart of accounts.
- Security: Features robust security controls for protecting sensitive financial information.
Accounting Software Limitations
- Upfront and Ongoing Costs: Accounting software licenses and upgrades involve initial and recurring costs.
- Learning Curve: Users need to spend time learning the software features and navigation.
- Technical Expertise: May require IT support for installation, maintenance and troubleshooting issues.
- Integration Challenges: Syncing with other apps like ERP or CRM can be complex and cause errors.
- Customization Limitations: Highly customized requirements may not be supported by standard features.
- Reliance on Technology: Outages, crashes or bugs can stop work if cloud-based or server issues occur.
- Security Threats: Like any software, it can be prone to security breaches, hacks and data thefts if not implemented carefully.
- Inability to Provide Accounting Services: Software only supports data entry and reporting, not advisory services.
- Lack of Personalization: Does not offer the personal touch of an in-house accountant for complex needs.
- Incompatible Data/Systems: Old data cannot always be migrated smoothly or integrated with legacy systems.
- Vendor lock-in: Difficult to change vendors due to proprietary data formats and migration hurdles.
- Specialized Features: May lack features for industry niches like accounting for non-profits or government.
- Training New Staff: Every new hire needs to be trained extensively to work independently.
How to Choose Account Software for your Company?
The industry and size of your business are important considerations when selecting accounting software. You need to choose a solution that caters to the specific needs of your industry, whether it is retail, manufacturing, services etc. and one that can efficiently handle the expected transaction volumes based on your current company size - whether small, medium or large. Equally important is assessing your budget for both upfront and ongoing costs. Some solutions offer free versions while others are paid - so pricing models need evaluation.
It’s crucial to evaluate the features and functionality required as per your business processes. This could include inventory management, payroll, billing, accounts receivable/payable, reporting and more. Also assess how easy the software is to use for data entry and navigation by employees. Ensure it can smoothly integrate with other tools you use such as banks, payment gateways, ERP or CRM systems. Consider the reputation and reliability of the vendor providing the software.
Evaluate support availability in case of queries along with training options during and after implementation. Look for flexibility to customize settings and workflows. Mobility is a factor if off-desk access is needed. Data security, backups, controls and compliance capabilities must be robust. And it should scale efficiently as your company grows over time. Free trials can help hands-on evaluation of top choices before selecting accounting software best suited to your unique requirements.
- Define your Needs: Assess features and processes required based on your industry, size, transactions etc. Make a list of all must-have and nice-to-have options.
- Research Top Options: Read reviews online, take demos and consult professionals to shortlist 3-5 providers popular for your requirements.
- Compare Prices: Check initial license costs, additional user fees, customization charges, ongoing subscription costs etc.
- Evaluate Ease of Use: Sign up for free trials to test usability, data entry flows, reporting generation thoroughly.
- Check Integration Ability: See compatibility with existing apps like Cloud ERP, banks etc. to avoid painful migration later.
- Consider Support Quality: Query providers on support channels, response times, types of assistance available.
- Verify Security Compliance: Important for accounting apps to safeguard sensitive financial data.
- Scalability for Future: Choose software designed to adapt well with company growth over next 3-5 years.
- Customization Flexibility: Assess room for tweaking work logic, adding fields as processes evolve.
- Growth Support: Inquire about upgrades, new features, support for changing needs as you expand.
- Talk to Existing Users: Ask other similar businesses about experience with different vendors.
- Take Decision Carefully: Weigh all factors before selecting accounting software suitable for long term use.
Frequently Asked Questions: Accounting Software
What is meant by accounting software?
Accounting software refers to computer programs that are designed specifically for managing accounting activities of a business. They automate tasks like general ledger, payables, receivables, financial reporting etc. reducing manual work.
What are the three types of accounting software?
The three main types of accounting software are:
- Desktop software: Installed on a local computer, like QuickBooks Desktop.
- Online/Cloud software: Hosted online on remote servers, accessible via web browser from any device, like Xero, QuickBooks Online.
- Mobile apps: Software designed for tablets and smartphones, usually accompanying online/desktop versions.
Why is Accounting Software useful?
Accounting software helps in tasks like invoices, payments, payroll, taxes etc. It saves time, reduces errors, provides real-time insights and collaborates easily. It improves accuracy of financial records, adheres to accounting standards and scales with business needs.
Is Excel an Accounting Software?
While Excel can be used to record financial transactions, it is primarily a spreadsheet program, not an accounting software. Accounting software have dedicated features for budgets, invoices, inventory, payroll, financial reports etc. that makes accounting tasks simpler. Excel lacks these specialized functions.
How is Accounting Software used?
Accounting software enables tracking financial transactions, maintaining general ledger and chart of accounts, processing payroll, generating invoices and receiving payments, managing bank accounts and reconciling entries. It provides insights through customized reports on cash flows, profit/loss, taxes owed etc.
What are the components of accounting software?
The key components or modules include general ledger, accounts receivable, accounts payable, payroll, billing & invoicing, bank reconciliation, reporting and business intelligence capabilities. Additional features may include inventory, job costing, custom fields, multicurrency support etc. depending on the software.