What Is the Definition of Accounting Software?


Accounting software has increased the effectiveness and efficiency of accounting firms and businesses over the past several decades. Computerized software has also streamlined accounting workflow, allowing companies to focus on producing goods and services.


Accounting software is a computer program that allows accountants to record and process financial transactions electronically. Several types of accounting programs exist, depending on the type of company and size of business operations.


Modules are utilized in accounting software to separate each accounting function. These modules are broken down by accounting function, such as accounts payable, accounts receivable, fixed assets and general ledger.


Most accounting programs integrate spreadsheet and word applications into the accounting system. This allows accountants the ability to export financial transactions into a manageable format for preparing and reviewing information.


Companies usually associate high installation and maintenance costs with accounting software. However, many of the programs available today can be customized to fit small and large businesses without sacrificing functionality.


Although accounting software can improve the accuracy and validity of financial transactions, it is still subject to the “garbage in, garbage out” theory. Accountants must review and verify financial transactions to ensure that all information reported represents a true picture of the company’s financial health.

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