The requirement of compiling error-free accounts was once left to the capabilities of accountants who could rely only on themselves. Thanks to computers and brilliant software engineers, we now have programs capable of doing just that. Despite needing the skill of experienced accountants, recording, tabulating and reporting have become far more accurate.
There are programs for all classes of consumers from people who require them for home use, small businesses and multinational companies. Price range is an indicator of what level of requirement the software can meet along with what modules are featured.
Personal accounting software
Programs designed for home use fall under the personal accounting software category. They have basic modules for managing household budgets, expenses, downloading bank statements, allowing wealth monitoring and bookkeeping.
The software is cheap, very easy to use and quite in demand by homeowners who’ve realized how they can better plan financial management with the use of accounting software.
Low-end software for small businesses
A notch above personal accounting but still nowhere near what high-end programs offer is low-end accounting software. Small businesses or people working out of home are the primary consumers. There are no specific modules but the general features do permit users to handle payrolls, generate invoices and reports, and reconcile accounts.
Mid-market software for medium to large businesses
Established or expanding businesses can benefit from mid-market software which offers more specific modules to cover several processes. Aside from the usual budget, expense, payroll and invoice generation, features such as multiple currency accounting are provided. This is because large businesses trade in different currencies and the programs can help manage aspects of finance efficiently.
A key feature of mid-market software is that it allows for networking although not in the scale of high-end programs. Still, it’s sufficient enough for accountants and financial heads to access the information contained from anywhere.
The cost of such programs is high and can only be afforded by established and large companies.
Enterprise resource planning (ERP)
Also called high-end market accounting software, ERP is used both by mid-market program consumers and multinational corporations witnessing transactions amounting to millions of dollars. Extremely flexible with an extensive list of modules the software can take months to implement, sometimes more than 6 months, and training programs generally have to be held for users.
Core modules of ERP include but are not limited to inventory management, production and order processing. The software offers a real-time view of business processes so that every department is integrated into the system.
Vertical market and custom software
Certain businesses and industries need accounting programs with features specific to their line of work that even ERP cannot offer. Primary customers include construction, medical and banking industries.
Industry-specific or custom software are the choices available and which to select from the two will depend on several factors. For instance, vertical market software has reduced implementation costs and more support availability while custom programs can include modules specific to the business’s needs but may have higher implementation costs.
As demand for accounting software rises, programmers are looking toward more advanced technology to offer higher-end software at lower costs. Businesses that grow from fledgling companies to multinational corporations need programs that are flexible enough to accommodate this growth. As such, it’s important that programmers come up with solutions to manage change without consumers having to switch over to new software every few years or so.
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