Aviva Directory » Computers & Internet » Software » Business » Accounting & Bookkeeping

The focus of this category is on computer software and software systems used in business accounting or bookkeeping.

Commonly, bookkeeping and accounting are used interchangeably. There is a difference between the two terms, however. Bookkeeping is a part of accounting, whereas accounting is a wider concept.

Literally, bookkeeping refers to the activity of maintaining (keeping) financial records (books), or the recording of financial transactions and events. The books are the books of accounts. Thus, among the tasks performed by bookkeeping software are the input of invoice and voucher details into enterprise resource planning (ERP) systems, receiving and recording payments made by customers or clients, as well as payments to vendors, and efficiently processing payroll information.

Accounting is the process that includes recording, classifying, summarizing, and interpreting the financial information of an economic unit. The economic unit is regarded as a separate legal entity. Accounting information is used for several purposes, including preparation of a trial balance, ledger accounts, and financial statements, as well as for the analysis of financial data.

Bookkeeping has to do mostly with the process of identifying, measuring, recording, and classifying financial transactions. It is the beginning stage of accounting and acts as a base for accounting. The objective of bookkeeping is to maintain proper and systematic records of financial transactions.

Accounting begins where bookkeeping ends. It is the process of summarizing, interpreting, and communicating financial transactions which were classified in the ledger account as a part of bookkeeping, its objective being to ascertain the financial position of the company and to form a means of communicating this to relevant parties.

As mentioned, however, accounting and bookkeeping are often treated as synonymous terms, and many of the bookkeeping and accounting software systems perform both functions.

Accounting software generally consists of application software that records and processes accounting transactions, and may include modules for accounts payable, accounts receivable, general ledger, payroll, and trial balance, which together function as an accounting system. Other modules might include stock or inventory, a purchase order system, or sales orders.

Business accounting software might be acquired as an off-the-shelf software package with local options, developed by a third-party for the specific needs of the company or for industry demands, or it may be developed in-house. Packages may be cloud-based, accessed by any Internet-enable device, or it may be installed on a company desktop or Intranet.

Personal accounting software, targeted toward home users, and supporting accounts-payable accounting transactions, budget management, and account reconciliation modules, may also be listed in this category.

Accounting and bookkeeping software may be purchased outright or subscribed to through a software-as-a-service (SaaS) system.



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