What is accounting software?

Essentially, accounting software refers to computer programs that are designed to perform accounting operations, and in effect, “do the books”. There are many different kinds of accounting software packages that cater to a wide variety of needs, and it is thus vitally important to buy the right bookkeeping software for your business.

The most basic accounting program is a single-entry system – also referred to as a personal finance manager – that facilitates the writing of cheques and the keeping of records. More complex tools such as general ledger, accounts receivable and accounts payable are featured in double-entry systems, whereas sophisticated business software programs carry out a range of functions including payroll, inventory, invoicing, fixed asses, support sales analysis and time-based billing. Enterprise resource planning, or ERP software, is the most complex accounting system, as it is highly customisable and designed to cater to company-specific processes.

While some software packages are developed and designed by the companies using them, others can be purchased as comprehensive business accounting solutions from financial software retailers such as QuickBooks.

The main features and functions of business accounting software programs involve accounts payable, accounts receivable, payroll and trial balance. Below, find brief descriptions of some of the main components of business accounting software:

  • Accounts receivable: This is where a business keeps a record of all the money it receives.
  • Accounts payable: This is where a business keeps a record of all its bills, the money it owes, and where payments are managed.
  • General ledger: This is what is commonly referred to as “the books”.
  • Trial balance: This is where the business can compare debits and credits, and ultimately, establish whether it is running at a profit or a loss.
  • Billing/invoicing: This is where invoices are generated before they are sent out to the company’s customers or clients.
  • Stock/inventory: This accounting tool helps businesses to manage their inventories.
  • Purchase order: This is where a business orders its stock or inventory.
  • Sales order: This is where a business keeps account of customers’ orders in order to populate its inventory.

Additional accounting software functions include debt collection, business expenses, inquiries, payroll software, financial reports, timesheets and purchase requisitions. When deciding which software solution to choose for your company, it is essential to understand your unique business needs and hence, to select a program with the appropriate features.

With more than 45 000 subscribers in South Africa alone, QuickBooks offers a comprehensive range of accounting software packages – one of which is guaranteed to suit the needs of your business. Why not contact us to discuss your business’s unique requirements today?