Basic Accounting Software

Basic accounting software should enable the user to:

  • Maintain a chart of accounts in the general ledger.

  • Have a transaction entry screen.

  • Allow for lookups of past transactions and account history.

  • Have different modules for:

    • Accounts Payable
    • Accounts Receivable and Invoicing

    The software should also allow for:

    • Double entry accounting
    • Accrual accounting.

    The initial setup of any accounting software is developing the chart of accounts. These are your account numbers you will use to make journal entries, and should be divided into assets, expenses, liabilities and equity accounts.

    When choosing this kind of software, keep in mind who is going to use it and how complicated and expensive it is to set up and operate. Also, be sure the software has safeguards built into it such as password protection, the inability to go back and change entries, and the ability of the software to record the username of the person making entries in the system.

    One of the most fundamental and important things the software should have is the ability to produce reports. All software will come with canned reports, but are these reports what you need? How difficult is it to create or modify reports? Is it necessary to hire a consultant to modify reports, or can someone on staff do it?

    Software can produce huge time savings and improve analysis. It is important though, that the software's total cost does not exceed the benefit.