Basic Types of Accountancy Included in the Accounting System


Main categories of the accounting software systems

It is well known that an accounting system is a complex series of calculations and balances that are used for managing income, expenses, and other business financial activities. In other words, accounting is used for collecting and analyzing information about the company's financial viability; therefore, it is one of the most critical parts of running a business.

If at first, the accounting process was carried out manually, nowadays, it is difficult to find a company that doesn’t use fully automated, computer-based, and even internet-based accounting systems. Before purchasing an accounting system that you will use to record financial transactions your business activities require, learn all requirements to your business activity and understand your business needs, make a search with the purpose of knowing which accounting systems are offered on the market and which features each system can provide you.


Basic accountancy types of the accounting system


  • Financial accounting is concerned with producing financial information for external use in the financial statements form. It focuses on collecting, processing, and reporting information for external users (investors, creditors, banks, government agencies, auditors, and others) outside the company for different purposes.
  • Managerial (management) accounting is concerned with producing financial information for internal use and includes cost accounting and target costing. It focuses on collecting, processing, and reporting information for internal users (managers, executives, analytics, and others) within the company with the purpose to plan, control, and improve business operations and making better business decisions.
  • Governmental (federal) accounting is concerned with creating and managing funds used to pay for expenditures related to services given by government entities.
  • Forensic accounting is concerned with the reconstruction of financial information in cases when a complete set of financial records is not available.
  • Tax accounting is concerned with compliance with tax regulations and tax-related matters.
  • Social accounting is concerned with reporting the implications of the company's activities on the ecological and social environment.
  • Project accounting is concerned with tracking the project's financial progress.
  • Environmental accounting is concerned with information about business decisions and business operations.
  • Inventory accounting is concerned with planning, tracking, and controlling inventory levels and inventory-related activities.
  • Industry-specific accounting is concerned with producing the industry’s specific financial information.
  • Not-for-profit (nonprofit) accounting is concerned with producing financial information for non-profit companies such as universities, medical institutions, and government (federal/non-federal) contractors.

basic accountancy types

Main advantages of using accounting software


accounting software systems
  • Automatically calculating Balance Sheet and Profit and Loss Statement based on the journal entries. 
  • Minimizing the probability of errors in financial documents by increasing accuracy and reducing errors in financial reports. 
  • Easily transferring the data to auditors and accountants. 
  • Automatically production and printing financial statements, invoices, journal entries, and other documents in a professional format. 
  • Increasing the speed of accounts processing via optimization of the financial processes.
  • The availability of the embedded tools and functionalities that enable performing financial analysis.
  • Reducing the overall costs vis saving time and money.

Timely reporting, recording, categorizing, processing, and analyzing financial information is the main key to successfully conducting business.



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