INTRODUCTION

Accounting software is a type of computer program that carries out accounting functions. This
software has now largely replaced older paper accounting systems. The software may be in the
form of packages or written specially to meet a business’s unique requirements. Accounting
modules include the general ledger, accounts receivable, accounts payable, payroll, inventory,
and fixed assets, and integrated accounting software usually links a number of these modules
together. Data from one module are transferred to another module; for example, updating
accounts payable automatically updates the general ledger.
The general ledger module is central to the whole accounting system. A small business may find
that a general ledger module is adequate. The general ledger module typically produces a chart of
accounts, journals, trial balance, general ledger, and financial statements. An accounts receivable
module is needed where there are significant amounts of sales transactions. The accounts
receivable module assists cash flow and credit policy. Receivables from customers are tracked,
reconciled, invoiced, and aged. An accounts payable module is needed only when numerous
checks are written. The frequency of the system may be weekly, semi-monthly, or monthly,
depending on the availability of cash discounts and the number of transactions. The accounts
payable package makes out checks to vendors, assures the receipt of discounts and prepares an
aging of payables.
Payroll software aids in determining the payroll deposit and offers needed payroll data at tax
reporting time. A good fixed asset package could provide description and categorization of
assets; number of assets accommodated; cost, life, and salvage value for fixed assets; allowance
for different depreciation methods; pro-rata depreciation calculation and fixed asset cost center.
In purchasing accounting software, compatibility, efficiency, integration, and cost are
considerations. It is better to purchase individual modules from one supplier. At the low end,
commercial programs are available at around $100. Low-cost accounting software programs
focus on cash flow and profitability functions, which small business owners are most concerned
with. Two examples of inexpensive small business accounting software are Quickbooks by Intuit
and Peachtree products. They are scalable products that may be upgraded as a business grows.
Low-end accounting software can be a fairly good accounting information system solution for
businesses with less than $10 million per year in revenues and fewer than 100 employees.
When transaction processing needs grow in volume and complexity, a mid-range software
package may be a better solution. Some examples are Microsoft’s Dynamics GP and Sage
Software’s MAS 90, Everest, and Accpac. With these programs, modules cost several hundred
dollars each and are usually sold separately. Many international companies do their business
globally and need software to handle transactions in multiple currencies. This software can
convert transactions from one currency to another and can even write checks in foreign
currencies. Another example of a specialized feature that may be included in higher-end
accounting software is the ability to split commissions among multiple salespersons.
The number of transactions processed monthly is one important factor in the choice between
low-end and high-end software. If a company processes only a few accounts receivable
transactions daily, an inexpensive package should handle this processing satisfactory.
Transferability is also important: Each time one changes software, employees may need to
reenter all transaction data. Cost savings are great when the software vendor offers programs that
allow data to be imported automatically into higher-end products.

HISTORY
The Age of Software
The Accounting Journal describes early accounting software as "handcrafted literally byte by
byte over the course of months." Companies relied heavily on proprietary systems. As computers
became more powerful, programmers created more generalized software that could serve many
different customers.
1978 saw the birth of Visicalc, the first spreadsheet software. Visicalc made it possible to carry
out financial modeling on the computer. A growing number of businesses saw a value in buying
computers.
Also, in 1978, Peachtree Software introduced an accounting software package for the early
personal computer. This made it possible for companies to computerize their accounting at a
fraction of the cost of buying a mainframe. By 1981, Peachtree offered an integrated office suite
that included a word processor and spreadsheet. It eventually began to develop a support team
that could explain things to the customers.
The end result was that by the mid-1980s, PCs and accounting programs had become part of
millions of business offices.
Another landmark development took place in 1983, when Intuit launched the Quicken line of
software. Unlike programs geared for business, quicken was designed for individuals and
families to use. Because Quicken didn't target accounting professionals, Intuit had to develop an
interface that non-accountants would find easy to use.
Shifting Players
As computerized accounting became more common, it also got more competitive. The Visicalc
spreadsheet eventually lost out to Lotus 1-2-3, which then lost out to Excel. Excel started as a
product for Apple computers. After the PC became the dominant business platform, Microsoft
brought out Excel for PCs. Open source software now offers free alternatives to proprietary
accounting programs.
The Internet Era
The Internet brought further changes to accounting. The International Federation of Accountants
lists some of the effects online:
 It's possible to manage or audit accounts electronically without being physically present.
This makes it easier for an accountant to handle multiple jobs at once, or to run an audit
at long-distance.
 Cloud computing, in which data is stored entirely online, makes it even simpler to access
and work with the accounts regardless of where the accountant is or which computer she's
using.
 Security threats, such as hacking, make it harder to keep client information safe.

BENEFIT OF USING ACCOUNTING SOFTWARE

Accounting software can save time and money, and offer you valuable and appropriate
reasonable business. It can do so by: Data entry in a simple way – fast and very quickly data
import, in a simple way it carried out once Speedily process – in between making a sale and
generating an invoice it reducing delays
 Reports automatically - debtors and creditors, on profit and loss, customer accounts, inventory
counts, forecasting, etc. Automating tasks – such as calculating pay, producing pay slips,
automatically calculating etc. Reducing the chance of errors – by computerizing calculations that
would be very low chance of errors Supports in other functions, such as online banking and
online any kind of working Computerized accounting packages, are only affordable to large
corporations, and are now within the budget of almost every business. At startup, a business may
begin with a simple spreadsheet or even a manual ledger, but as the company grows, it becomes
time to look at more efficient, computerized systems. There are several considerations to ponder
before selecting a computerized accounting package.
Time Saving
In accounting package, the major thing and the most important advantage is that it saves a lot of
time over manual bookkeeping. With a computerized accounting package, front end business
documents and back end transaction recordings are completed simultaneously. For example, you
can create customer invoices, prepare bank deposits and write checks in the program, with the
added benefit that the system records each transaction for you. We can manage all over the
working of accountancy within few times.
Financial Statements:
In a manual accounting framework, the general record is accommodated toward the end of the
year and the purifies for every record are assembled to make an arrangement of money related
proclamations for assessment and administration purposes. In an electronic bookkeeping
framework, monetary articulations for any time frame can be created with the snap of a catch.
This permits a business director to survey an organization's monetary execution continuously and
address worries before they get to be risky.
Cash Flow Management:
In accounting there is a great advantage that it allows you to record receivables and payable in
every system. This allows the system to project your cash flow position into the future. For
example, if you have submitted all your bills and customer invoices in the program with their
due dates, you can print a report that will tell you if you will have enough money between what
you have now and what you expect to be coming in to cover the bills that are due. You have
records of all bills and invoices. This forward planning tool can help you avoid overdraft charges
and late fees.
 Learning Curve:
The other advantage of accounting system software is learning curve, especially if you have not
used one before. It can often be difficult for a small business owner to spare the time to learn
how to use the package properly, which can lead to errors and reconciliation issues. Proper
training is essential to getting the most out of your accounting system. We can easily cope with
errors in small businesses.
Fixing to Computer Availability:
Another drawback of automated bookkeeping bundle is their reliance on the organization's PCs
being up and running. In the event that your business experiences booked PC upkeep or other
downtime, you will need to hold up until the work is finished to have the capacity to get to
money related data on clients, suppliers or representatives.
Advantage of accounting software:
Too much advance for new generation and especially for youngsters that they work very speedily
by accountancy, the process run faster and more efficiently a major advantage. In all over the
world. There are many advantages of accounting software. Instead of using the old-fashioned
manual paper and pen, you can print professional-looking invoices fast. You even can send out
invoices via e-mail. The faster invoices get out, the faster you are likely to get paid. Many
invoicing or billing software packages interface with the rest of your accounting software,
making the process of preparing invoices and recording them seamless, fast and automatic.
Minimize Errors:
When you use a computerized system, you make some mistakes in calculating totals or in typing,
decreasing confusion. Invoice software usually allows you to include a tax percentage when
appropriate, with the system performing all calculations. This is a useful advantage, especially
when you have detailed invoices where hours or specific items are billed at different rates. Once
a system is set up properly, you pick and choose items to be invoiced and the rest is done for
you. There is many low risk of blunder and error in accounting software.
Hybrid solutions:
As technology improves, software vendors have been able to offer increasingly advanced
software at lower prices. This software is suitable for companies at multiple stages of growth.
Many of the features of mid-market and high-end software (including advanced customization
and extremely salable databases) are required even by small businesses as they open multiple
locations or grow in size. Additionally, with more and more companies expanding overseas or
allowing workers to home office, many smaller clients have a need to connect multiple locations.
Their options are to employ software-as-a-service or other application that offers them similar
accessibility from multiple locations over the internet.
 SaaS bookkeeping programming:
With the approach of quicker PCs and web associations, bookkeeping programming
organizations have possessed the capacity to make bookkeeping programming paid for on a
month to month repeating charge rather than a bigger forthright permit expense. The rate of
selection of this new plan of action has expanded consistently to the point where legacy players
have been compelled to turn out with their own online renditions. Cloud bookkeeping
programming appears to all the more quickly receive by regions where costs are for the most part
higher because of higher delivery expenses and value separation hones.
Computerized invoice:
A major advantage of using a computerized invoice system is the capability to run reports to
determine which customers have paid. An aging report shows you who owes you, how much and
for how long. This is done easily and puts you in control of your finances. You can contact
customers who are late-payers, minimizing losses. A maturing report demonstrates to you who
owes you, how much and for to what extent. This is done effortlessly and places you in control
of your funds. You can contact clients who are late-payers, minimizing misfortunes. A well-run
business relies on prompt and reliable information, and a computerized invoicing system fits this
requirement well.
Organization:
It is easy to lose or forget about invoices, especially when they are prepared manually. They can
get lost in the mail, or they may be misspelled in a manual system. With an accounting software
package, the data is there--all organized in one place to be reviewed, reprinted and resent in case
of problems. You usually can look in the system for invoices based on names, amounts or
invoice numbers. It is a fast and easy process because the software organizes data as it is entered.
Information Accuracy:
Organizations huge and little should keep exact records of their funds. In a few circumstances,
there might be lawful implications for anything besides the most points by point and particular
records of bookkeeping practices. Obviously, it is difficult to totally take out human blunder in
any attempt, yet bookkeeping programming can disentangle parts of record keeping that may
some way or another be inclined to botches. These projects consequently make the important
estimations when you enter orders, exchange subsidizes or continue with any of the different
budgetary exchanges you are liable to experience when maintaining your business. As opposed
to depend all alone work with a paper record and a number Cruncher, let bookkeeping
programming computerize assignments and decrease mistakes.
Time
Bookkeeping programming at least spares you time in various ways. By wiping out manual
counts and record keeping, you can put your vitality to better use by giving the product a chance
to handle errands you would regularly make sense of yourself. In the event that you work with a
staff, you may spare worker hours with projects that robotize assignments, for example,
monitoring representative hours and producing finance. These errands could involve a
noteworthy piece of your work day on the off chance that you oversaw them totally all alone.
Inventory:
If your business manages a product inventory, you no doubt understand how important it is to
always know what you have in stock. Good accounting software automatically tracks inventory
as you process product orders. Some programs can project when you will run out of a product, so
you know when to order more. Using accounting system software in inventory tracking has a
time-saving advantage along with the accuracy of results.
Software excels:
Accounting software excels at analyzing your business practices and letting you quickly identify
how money flows through your operation. When an application manages all your financial
transactions, it has extensive data at its disposal to generate various reports. You can quickly see
how your revenue is divided among different operating costs. You can calculate your bottom line
more efficiently and track which parts of the country generate the most interest from customers.
The reporting options are virtually unlimited depending, on the type of software you use and the
information you provide it. You will have all the data you need to run your business at your
fingertips.
Tax benefits:
At year end, many organizations find themselves rushing through their business tax returns.
Some find this task so daunting that they outsource the process to a tax professional rather than
deal with it themselves. Luckily, most accounting software is designed so that it is compatible
with various types of tax software. If the two are successfully integrated, a business owner can
efficiently save themselves the cost of tax preparation each year.
 THE DISADVANTAGES OF USING ACCOUNTING
SOFTWARE
Almost every article or report you read today talks about the advantages and sometimes the
necessity of business owners to incorporate technology into every aspect of their business. But
an accounting software package is not necessarily the best idea for every small business. If you
are self-employed or own a small business, you should consider the downside to utilizing
accounting software as well as advantages gained.
Cost
Although some small business accounting packages are reasonably priced, the cost of the
software is not the only cost of using the software. Accounting software requires minimum
standards for computer use in regards to RAM, processor speed and hard drive memory. Making
a backup of your accounting data may also require more storage space than an Excel spreadsheet,
which is easily copied to a flash drive. Technical support for the software may cost extra, and
you can incur annual licensing fees in order to receive upgrades. If you are not skilled in
software installation or accounting setup, you may also incur the cost of hiring a consultant to
perform those tasks for you.
Difficulty
Some accounting software packages are designed specifically for non-accountants, but you will
still experience a learning curve when converting to any software package. If you have never
used accounting software before, learning the accounting terms, layouts and determining a
proper setup may be more difficult than the benefits received from utilizing the software.
Running your own business already comes with enough stress and aggravation. You should not
add the stress of learning accounting software to the mix unless it is absolutely necessary or the
gains from utilizing the software outweigh the losses.
Time
Processing expenses and invoices in accounting software will usually take more time than simply
logging the expense on a ledger pad or spreadsheet software and creating handwritten invoices or
spreadsheet-based invoices. If using the computer is not a large part of your daily routine, the
time required to process basic daily financial data may outweigh any benefit gained from the
software.
Maintenance
Maintaining accounting software not only includes performing upgrades to the accounting
software package, but also maintaining and upgrading all the necessary equipment to utilize the
accounting software as new versions can require upgraded equipment. That equipment often
includes your PC or laptop, monitor, printer, Internet connection and modem, backup drive and
operating system. If you do not wish to spend the time and money to keep your equipment in
compliance with the accounting software, it is best to stick to spreadsheet or ledger accounting
Reliance on Computers
If your computer crashes or data is corrupted by a virus, you won't be able to use your
accounting software until the problem is fixed. This also means you won't have access to any
entered data until the computer is running again. Your data can also be corrupted, meaning you
will have to re-enter information unless you've backed up your files. In addition, if there's a
power failure, your software will be unusable unless you're on a battery-powered laptop.
Fraud
Accounting software data requires extra levels of security to prevent problem like fraud and
embezzlement. Software makes it easier for users to alter data, making fraud easier to
accomplish. As a result, there is an increased need for internal auditors to check for any data
inaccuracies. Security measures must also be taken to limit the amount of control users have over
any accounting software's features.
Additional Software
Most accounting software requires you to have additional software in order to view reports. For
instance, some programs allow you to export data as a PDF file or an Excel spreadsheet. This
allows users without the accounting program to view the data. However, the viewing software
may pose an additional expense to the user.
Human Error
While it is easy to write down numbers incorrectly, it is even easier to mistype a number.
Entering data into accounting software too quickly may result in serious errors. With the
program performing calculations, it can be more difficult to trace the cause of the problem.
Spreadsheets, digital ledgers or written ledgers make tracking simpler and faster.
Training
Accounting software requires you to take the time to learn how to use it. While you may be an
experienced accountant, you'll still need to learn what each button and menu command does in
order to use accounting software effectively. This learning curve can result in costly errors. In
some cases, paid training may be necessary to learn how to perform certain tasks. If you're not
tech savvy, the process could be even more difficult.
Loss of Data or Service
When a business is reliant on accounting software, any loss of service due to a power or
computer outage could cause a work disruption. Work disruptions can prevent the input of new
information as well as prevent access to stored information. Additionally, if information is not
properly backed up, a computer outage could result in lost financial data.
Incorrect Information
The information in an accounting system is only as valid as the information put into the system.
Since most accounting systems require some manual input of data, financial results could be
incorrect unless all input data is reviewed. If there is a tendency to only review the final reports
or output of an accounting system, it may be difficult to find faulty information.
System Configuration
Every business has unique aspects that may cause difficulties when it tries to tailor a generic
accounting software package to its needs. While customization is available for many programs, it
may cause downtime and potential inaccuracies if not done correctly. Also, as a business grows,
there may be a need to change accounting software packages; this could cause a large disruption,
as information must be migrated and new training is needed for personnel.

DIFFERENT ACCOUNTING SOFTWARES

FreshBooks
FreshBooks is comprehensive and modern accounting software used by over 5 million
entrepreneurs and considered one of the best with unique features such as a payment history, a
download tool, daily dashboard, a mobile application and so much more. Very user-friendly as
well.
Xero
Xero is amazing and also widely used by legions of business owners and individual contractors.
Definitely caters to small to mid-sized businesses. Has a number of notable features, some of
them include inventory management, bank integration, built-in time sheets and tons of other
useful resources.
QuickBooks Online
QuickBooks Online is the most popular and experienced accounting software with over 15 years
of solid experience. Used by business owners, organizations, freelancers and biz professionals.
Has practical features which include share & collaboration, multiple-user interface, free
accounting plan upgrade and automated financial reports.
FreeAgent
FreeAgent is a cloud-based accounting solution for freelancers, accountants and small businesses
owners to manage invoices, expenses, payroll, tax returns and other accounting tasks. FreeAgent
also offers dedicated mobile apps for iOS and Android devices. FreeAgent allows accountants to
set up recurring invoices which are automatically sent to clients as reminders to make payments.
Users can also track expenses by uploading the photo of an expense receipt with the FreeAgent
mobile app. The solution offers a built-in stopwatch feature to manage timesheets and track
employee hours
Outright
Outright is a cloud-based accounting solution for small businesses. The software allows
executives to manage sales and expenses, calculate taxes and facilitate electronic payments.
Outright’s invoicing feature allows business professionals to generate and share invoices with
clients after receiving payments. In addition, the software sends an automated “thank you” email
to clients following payments in order to maintain customer engagement.
Aplos
Aplos fund accounting is a cloud-based system designed specifically to serve the needs of
churches and nonprofit organizations. Aplos fund accounting is available on a standalone basis
or within an integrated suite with online donation management, contribution management and
reporting functionalities.
TurningPoint for Accounting
TurningPoint Accounting is a solution best suited for companies who outgrow QuickBooks and
other systems meant for smaller businesses, but aren’t yet ready for a more sophisticated system.
This solution is designed primarily to serve businesses in the distribution, manufacturing, and
service-providing industries with around $25 million in sales volume.

CONCLUSION
Accounting software systems are critical to the production of quality accounting information on
a timely basis and the communication of that information to the decision makers. Existing
literature offers evidence of the relationship between these Accounting Software System and
business performance; though it is important to highlight that an in-depth study is required to
examine other factors that may influence this relationship. The service quality dimension (User-
friendly, reliability, efficiency) impact to the business performance 66.4%.it is not affected to the
33.6% to business performance. This study showed that there is strong relationship between
accounting software system and business performance, which means access to accounting
information, will lead to organizational effectiveness. Therefore, it can be concluded that
accounting information systems have an impact of the business performance. The popularity of
accounting software is on the rise. It appeals to people when they think of getting rid of thick
paper books. Still, a new system tends to confuse people easily. This is why it is important to
discuss the benefits people are likely to enjoy with the system and how it can be of great
importance in business or what problems they may face.