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Types of Accounting Software

Today no business cannot but use accounting software because it helps automate a large number of processes, manage finances and expenses efficiently and save a lot of time.

If you are reading this article, you are probably looking for accounting software for your company.

There are several types of accounting software. Which one does suit your company’s needs?

In this article, we will consider the following types of accounting software and also mention some companies that represent them:

  • General ledger accounting software
  • Accounts payable software
  • Accounts receivable software
  • Budgeting software
  • Financial reporting software

Depending on software, application or a chosen paid plan, all of these types can be combined or used separately.

General Ledger Accounting Software

General ledger accounting software is the main repository of accounting data and records.

This type of software records various financial transactions that are not recorded in other types of software.

The general ledger allows to create essential financial documentation such as profit and loss statements, balance sheets and others.

The information stored in the general ledger can be used to conduct audits.

Here are some of the companies offering general ledger accounting software:

  1. QuickBooks – combines various types of accounting software. Provides a couple of paid plans, the price of which depends on the needed application and the size of the business. Prices range from $10 for a simple start packaging to $30 for advanced packaging per month. Free trials are offered for all the plans so you can test the functionality.
  2. Intacct – allows to manage multiple entities and close sub-ledgers separately. For prices you should contact the vendor as they compile individual packages according to the needs of a company. A free trial is also available.

Accounts Payable Software

Accounts payable software offers ledger software features and helps control money that a company owed to creditors.

In other words, this type of software helps keep track of products and services that you already have bought but haven’t paid for them yet.

Accounts payable software allows to:

  • Track invoice payments according to payment and discount terms, vendors, etc.
  • Set recurring billing
  • Set automatic reminders for paying invoices
  • Get reports about unpaid invoices

Here are some of the companies offering accounts payable software:

  1. Tipalti – there is a free software demo, but to get the quotes you need to contact the vendor.
  2. Procurify – allows to compare items that are listed in an invoice with a corresponding purchase order. There are a couple of plans that vary on functionality, data storage and the number of transactions per year. A free trial is also available.

Accounts Receivable Software

Accounts receivable software helps keep track of products and services that you have already sold but the clients haven’t paid for them yet.

This type of software provides an aging feature which allows to divide all the clients into groups in accordance with exceeding dates of their payments.

Accounts receivable software allows to:

  • Create invoices and bills and send them to customers
  • Handle the processes of invoicing customers and monitoring payments
  • Create master files that help organize customer information such as name, phone number, address, etc.

Here are some of the companies offering accounts receivable software:

  1. Xero – updates bank account and credit card information on a daily basis. Prices start from $9 for limited invoices, bills and transactions to $70 per month. A free trial is also available.
  2. PaidYet – allows to accept payments, set reminders, etc. You can pay as you go which will cost 3.5%+$0.35 per transaction. You can also inquire about the prices for personalized plans. A free trial is also available.

Budgeting Software

Budgeting is the process which consists of planning monthly expenses and incoming financial resources and then checking whether income can cover all the expenditures.

Proper budgeting ensures stable company performance and helps save money.

Budgeting software allows to:

  • Create reports on income and expenses
  • Create forecasts depending on the industry of your company
  • Plan and approve budgets
  • Employ collaborative budgeting
  • Try modeling

Here are some of the companies offering budgeting software:

  1. FreshBooks – allows to track balances and expenses and helps keep within the budget. Paid plans range from $15 to $50 per month, 30 days trial provided in each plan.
  2. Multiview – includes financial dashboards, budget forecasting, electronic approvals. You can choose the features according to your company’s needs and then get the price for the chosen features. A free trial is also available.b

Financial Reporting Software

International Accounting Standard Board (IASB) states that the main financial reporting objective involves providing “information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions.

Financial reporting software allows to:

  • Provide financial reports to creditors, investors, etc. to ensure their investments are reliable
  • Get information as to how a business currently operates and employs resources
  • Create performance management reports
  • Conduct audits in accordance with financial reports

Here are some of the companies offering financial reporting software:

  1. Capshare – provides all kinds of financial analysis. There is a free plan with limited functionality which includes up to 20 shareholders.
  2. Float (can be used with FreeAgent, Xero, QuickBooks Online only) – allows to view company’s cash flows on a day-to-day, weekly and monthly basis. Prices range from $59 for 3 accounts to $199 for 100 accounts per month, billed annually. If billed monthly, the prices will be higher.

Conclusions

Accounting software can be divided into five types:

  1. General ledger accounting software is a main repository of financial data and records.
  2. Accounts payable software helps track invoices that customers owe to creditors.
  3. Accounts receivable software helps track products and services that you have already sold but the clients haven’t paid for them yet.
  4. Budgeting software allows to plan income and expenses and make forecasts depending on plans.
  5. Financial reporting software allows to create financial reports, analyze them and conduct audits on the basis of reports.

All of these types of accounting software can be combined in one tool or application, or can be bought separately according to your company’s needs.

Which type of accounting software are you looking for?