Accounting Software Categories

An accounting system helps manage business expenses, income, and other financial activities. It allows companies to track all their financial transactions such as sales, purchases, liabilities, etc.

You may need accounting software for different reasons:

• You have a new company and need accounting software for your business.
• Your organization has outgrown the current accounting system.
• You have a fast-growing business that needs an accounting software solution to grow with your company.
• You use outdated software.
• You have to change your business processes. For example, it is comfortable to use the same accounting system for a long time, but the company's financial health can need switching to new software that meets your business needs.

In the search for the best accounting solution, any business owner should start with getting the big picture. Learn how accounting software solutions are divided and for which business needs each type of computerized solution is designed. All accounting software applications and systems can be divided based on different principles.

Accounting software systems can be divided into categories depending on:

• Accounting fields

• Manufacturing accounting software systems
• Route accounting software solutions.
• Construction accounting computerized solutions.
• Personal accounting computerized programs.
• Retail accounting software systems.
• Nonprofit accounting software systems.
• Payroll accounting software.
• Tax accounting computerized solutions, and others.

• Data storage

• Desktop accounting software is locally installed on laptops or desktop computers.
• Cloud accounting software is hosted on outlying servers, and to have access to their data, users use the Internet.

• Company size

• Entry-level accounting computerized programs are the best solution for individual entrepreneurs and micro-enterprises with five or fewer employees. This type of accounting software is the cheapest of the offered

            products and provides standard functions such as accounts receivables and accounts payables and basic financial reporting.            
            Intuit QuickBooks Online, FreshBooks, Wave, Sage 50cloud, Xero, Zoho Books, GoDaddy Bookkeeping, and others.
• Small to medium business accounting software solutions, in addition to the basic features offered by the entry-level products, provide more features that enable supporting and processing other business operations such as purchase management, inventory management, and others. These products allow for up to twenty-thirty simultaneous users.
  FreshBooks, Sage 50cloud, QuickBooks Enterprise, Xero, Tipalti, Zoho Books, Intacct, and others.
• Enterprise accounting software systems are the most expensive and designed principally for large organizations. These systems provide more advanced and robust features such as customer relationship management, human resource management, and others. They also can support an unlimited number of simultaneous users.
  Board, Apprise, SYSPRO, ForeMost, Multiview, Chempax, Sage, and others.

Accounting software is more than receivable and payable accounts, invoicing and billing, general ledger, and other standard elements. Accounting software is a complex and comprehensive system combining financial accounting and managerial accounting.

Financial accounting includes the processes of recording, summarizing, and reporting the financial transactions resulting from the business operations over some period. Summarized financial transactions are recorded in the financial statements that present the following primary financial data:

• Assets – economic resources that a company owns or controls and currently produce or can produce positive economic value in the future. 
• Expenses – economic costs a company undergoes because of its business operations to earn revenue during a specific period. 
• Revenues are the amount of money a company receives from its business activities during a particular period. 
• Liabilities – financial debt and obligations which a company has gained during its business activity. 
• Equity – the assets value less the amount of all liabilities of those assets.

Financial accounting data gives a complete picture of the company's operating performance during a specified period.

Managerial accounting focuses on collecting, processing, and reporting information for internal users (managers, executives, analytics, and others) within the company to plan, control, and improve business operations and make better business decisions.

• Identifying financial information. Collecting information via referring to a financial accounting system and regulating data on financial statements.
• Measuring and modifying financial information to meet the specific needs of the end-users.
• Analyzing financial information. Presenting accounting data in a meaningful way and Ratio (ratio metrics), Vertical (percentage of the base figure), and Horizontal (change over a period of time) analysis.
• Interpreting financial information to help managers eliminate data ambiguity and prevent wrong decisions.
• Communicating financial information to managers for the persecution of the company's goals.