In simple words, accounting software is a tool to keep the track of entire cash flow. There are different kinds of software available in the market you can choose from.

Many companies are providing modules that you can integrate into your business according to the requirements. Accounting software is based on conventional accounting systems. The only difference in it is they are automated and all the ledgers and books are in soft form and easy to handle. This software has made an accountant’s life very easy. They don’t have to work all day and night to reconcile the sheets. You can easily keep the track of numerous transactions. This software allows you to manage the payroll system of your employees. Other features like General Ledger, Account Receivables, Accounts Payable, etc are included in this software. You can also customize them according to your needs or industry. For example, the accounting software of a non-profit organization will be different from a government organization.

Different types of Accounting Software

It is a type of application software that is used to manage and keep the track of all the transactions within an organization. If you want to run your business smoothly and be profitable then you have to keep records of all the transactions. This software enables you to keep track of profits and losses in which your business is going. It has reduced the workload and increased the efficiency of the employees. There are different types of accounting software available in the market but they are classified into different categories that are given below:

  • Spreadsheets: It is a very important accounting tool used by many organizations around the world. It consists of grids of many rows and columns. It is very easy to store and maintain relevant data in spreadsheets. Many businesses are dependent and still using spreadsheets for accessing and maintaining their financial data for a very long time. They can be used for almost every accounting purpose. You can even visualize your data by using charts and graphs. Microsoft Excel is one of the widely used software around the world. If you are planning to run a small business then feel free to give it a chance to meet your accounting needs.
  • Commercial Accounting Software: To manage income and expenses and to keep the track of business health a commercial accounting software is capable of more than enough. You can totally customize them according to your requirements at any time. It means your business can configure them according to its specific needs. QuickBooks is one of its kind and the most popular software in the world which is used to generate customer invoices, bill payments, generate a report, and manage the taxes. Many other commercial accounting systems are being used like Xero and FreshBooks accounting. Sometimes you have to take the consultation of the vendors of this software to install and maintain accordingly and the installation process can be hectic for you.
  • Enterprise Accounting Software: This software is specially made for enterprise clients. The scope of this software is beyond the accounting processes. Enterprise-level software consists of different modules like payrolls and billing, ledger maintenance, allocation of budget, and forecasting the business environment. ERP[i] or enterprise resource planning is software that is programmed to handle the complex operations of an enterprise. It is an integral part of this software to create a channel between different departments of an enterprise. The installation process of this software can be lengthy and it may take you several months to set it up for your business. It can only be afforded by big companies because it is highly expensive.
  • Custom Accounting Software: These are the accounting applications, which are developed according to the demands and needs of a business. It means they are specially made for a specific company and they cannot be used by any other business entity. If a commercial accounting software couldn’t fulfill the requirements of a business, then they can have their own accounting applications. It is very rare for a business to go for its own accounting software but it is practiced by many enterprises.

These days, with advancements in technology these applications are now cloud-based. It means a user can access the software anywhere in the world. They do not have to install it on their workstation. You just have to log in from the vendor’s site and access your software anywhere around the world.

Top-Rated Accounting Software

Here is the list of top-rated accounting software around the globe given below:

FreshBooks: It is one of the best accounting software specially made for small businesses. It is very popular for helping and managing small businesses. When you start a new business then your primary focus is to make sure if it’s running smoothly or not. Normally small businesses lack resources and cannot afford high-end accounting applications. FreshBooks[ii] make sure that you will have all the necessary modules at reasonable rates.

QuickBooks Online: It provides the customized means to run an enterprise. It is one of the best and modern types of accounting application. It comes with rich and scalable features that enable an enterprise to boost and fulfill its organizational obligations. You can use it for your medium-size business too as there are some levels of modules that are on demand. It is very easily available in the market and very easy to use the software.

Xero: it is online accounting software that is popular because of its advanced features, customized dashboard, and online support. It is equipped with the best and latest features, tools, structures, and resources. The unique feature of Xero is its remote access which allows you to track and record all the transactions from any type of device like desktops, tablets, and smartphones.

Sage Business Cloud Accounting: It is cloud-based accounting software which very popular these days. You can integrate it into any size of a business. It is trusted by more than 2.5 million people around the globe for the past 38 years.