There are many types of accounting software applications on the market today. Some applications are intended to perform accounting functions for large corporate organizations, while others are meant for personal use. Still other applications fall somewhere in between, performing functions suited to small businesses, as well as those suited to the average person. Available software ranges from the very simple to the very complex, with much variation in price as well.
Accounting programs can be useful for such functions as recording and processing accounts receivable and accounts payable transactions. Some software applications can be used in payroll processing, the documentation of tax transactions, and the creation of related reports. It can also be used for billing clients and customers and debt collection. Some programs even provide for timesheet record keeping, useful for professionals who need to keep track of the hours they work.
Software that is designed for home use is often referred to as personal accounting software. This type is used mostly in managing household budgets and expenses. Some personal software makes it possible to download bank account information directly from the Internet for use with the program.
Low-end products are generally used by smaller businesses and can typically be found for sale by a variety of retailers. Usually, software in this class is not very specific and can be used for a wide range of businesses. This type of program is usually adequate for such uses as generating invoices, reconciling accounts, and handling payroll.
The next step up in the realm of accounting software consists of applications capable of performing a variety of functions important to business accounting. Referred to as mid-market software, accounting applications in this class perform general business accounting functions and frequently include integrated management information systems. Many software applications at this level are capable of providing for accounting in several different currencies. It is usually purchased from a dealer.
Higher-end software is more expensive and is usually much more complex. Generally designed for use by large businesses with millions of dollars in transactions, high-end programs usually have very sophisticated features and options. Software in this class also allows for a high level of customization. Typically, it is sold through a dealer.
Some companies choose to develop their own accounting programs, gearing them completely towards their unique needs. Other companies choose to purchase ready-made software packages. Many organizations employ a combination of the two, purchasing software and applying local modifications to make it more efficient.