I got a question from my friend, he said that he still confused how to choose accounting software easily. Of course, someone without accounting foundation will ask such question. I was not surprise with that. Picking the right software may confuse someone frequently especially you don’t know what you looking for exactly. Anyone who wants to choose accounting software has to identify what your business really need before begin to choose the software. Identify your business requirement will give you better chance to get the software which fit to your business. However, many people skip this step and they fail to pick the good software eventually.

I want to explain that almost all accounting software have basic modules and supplement modules. Basic modules will available to almost all kind of accounting software. Typical module will vary one software with another. So, I just want to explain what modules you really need and what you don’t.

Basic Accounting Software Modules

General Ledger or usually called GL is a collection of the group of accounts that supports the value items shown in the major financial statements. It is built up by posting transactions recorded in the sales daybook, purchases daybook, cash book and general journals daybook. The general ledger can be supported by one or more subsidiary ledgers that provide details for accounts in the general ledger (Wikipedia). The accounting software has to able to make General Ledger report.

Account Payable is subsidiary ledger that records amounts that a person or company owes to suppliers, but has not paid yet (a form of debt), sometimes referred as trade payables. – Wikipedia.

Accounts receivable represents money owed by entities to the firm on the sale of products or services on credit. In most business entities, accounts receivable is typically executed by generating an invoice and either mailing or electronically delivering it to the customer, who, in turn, must pay it within an established time frame, called credit terms or payment terms. – Wikipedia.

Typical Accounting Software modules

Inventory – If you are in retail business, you should buy this module. This module gives information the quantity and location of your stocks. Some of good software give the feature to remind you if the stock will run out.

Payroll – In accounting software, payroll refers to the amount paid to employees for services they provided during a certain period of time. Not only have that, this module can manage salaries for an employee, wages, bonuses and deductions. Some software can manage holidays as well. You will need this module if you have a lot of employee.

Fixed assets – also known as a non-current asset or as property, plant, and equipment (PP&E), is a term used in accounting for assets and property which cannot easily be converted into cash. Accounting software allows you to record and register all fixed asset.

Job Costing – it will be helpful if you are in construction “job” or manufacturing goods in batches. You can track every production cost into single job. Some software allow you to compare the cost with the budget. It is very important to control your cost and get profit in every job.

Still Many Accounting Software Modules

There are still many modules out there such as Time Billing, E-Banking, Purchase Order, Cash Book etc. But, the more module you need, more expensive it will be. So, identify what your business really need is very important. Think what your business need and what modules you will buy then you will get good product and increase your business process efficiently and effectively.

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