Defination of Accounting Software
Accounting software is application software that records and processes accounting transactions within functional modules. Features of Acounting Software
i. Interoperability: The data entered into your accounting software can be productively used by various business applications in HR, sales, shipping and other key business sectors. Conversely, you may want your accounting program to draw information in from other software products. That's why you'll want to check on an accounting program's ability to interoperate with other software before deciding on whether to purchase it. ii. Scalability: With hard work, and perhaps some luck, your business will be larger and more prosperous in the years ahead. Will your accounting software be able to keep pace? Look for a product that accommodates, or can be easily upgraded to accommodate, a progressively larger number of users and a growing amount of financial data and transactions. Ask vendors about their programs' limits in these areas. iii. Expandability: Your business may grow in scope as well as size. The accounting program vendor should either offer add-on modules that allow customers to slap extra capabilities to its product, or a migration path to a full ERP environment. iv. Security: Your business depends on its accounting software for its very existence. If data is lost or tampered with you stand to lose time, money, business secrets (such as sales or profit data) and, if the damage is severe enough, your company. Any vendor should be able to tell you about its software's built-in security features as well as how its product can mesh with your own on-site safeguards (such as anti-malware technology and network firewalls). v. Internet connectivity: With the whole world moving to the Internet, it's only logical that accounting software should follow the crowd. That's why you'll want to make sure that any accounting software you consider has the ability to send and receive digital documents and handle electronic fund transfers. Benefits of Accounting software
Accounting software systems provide numerous benefits in the areas of information management, regulatory compliance, business process automation and real-time reporting. The following financial system benefits are common in most accounting software applications. Control – A strong accounting package provides management with internal controls to record transactions in a timely and consistent manner. These controls ensure that only authorized users are performing prescribed tasks and that adequate segregation of duties is being enforced to help prevent fraud and abuse. Well designed internal controls are flexible enough to allow for the reallocation of responsibilities as staffing and workloads shift. Strong controls also help ensure compliance with regulatory mandates such as Sarbanes-Oxley, IFRS (International Financial Reporting Standards), GAAP (Generally Accepted Accounting Principals) and the host of taxing authorities that face today’s organizations. Security – Access to information should be managed in a thoughtful and logical manner. For many companies, accounting software security is based on a need-to-know basis. In addition to access management, the data itself should be secured from malicious activities, as well as system failure or natural disaster. A secure system provides for recovery up to the point of failure. Security also means that database rules are enforced to ensure integrity and prevent corruption. Strong data types and server-based referential integrity help ensure that the data is meaningful and as free from error as possible. Information – The ultimate goal of an accounting system is to provide financial information to management and decision makers. For example, how has the business performed and how is it likely to perform? A well designed accounting system provides its users with real time analytical information and the tools to shift into...