Last Updated 25 May 2020

Accounting Software Packages

Category Accounting
Essay type Research
Words 1172 (4 pages)
Views 390

Finding the most suitable accounting software package for office and business use can be a daunting task especially with so many products competing in the market. Each software offers various benefits for companies. The primary consideration that consumers should bear in mind is that the accounting software must cater to the needs of their customers or company. There are many features bundled in these features. However, the program to be considered should just be the right ingredient(Johnston, 2003).

Setting up and installing accounting softwares into the computer system is not an easy task. Not to mention the fact that it can be costly and may eat up some of the time of the company's personnel. This is the reason why it is important to choose a software that can really provide solutions to the company's accounting needs.  Otherwise, the firm may have to invest time and money all over again(Johnston, 2003).

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Essentially, there are four categories of accounting software packages that can be purchased namely “entry-level, small-to-medium business (SMB), small-to-medium enterprise(SME), and Enterprise Resource Planning (ERP)”(A Strategy for Finding the Right Accounting Software, 2003). SMBs and SMEs comprise what is called the middle market(Johnston, 2003).

Entry-Level Software

This kind of accounting software is the perfect package for small firms generating an income of less than $5 million with a payroll of about 20 employees. According to a 2002 report by the U.S. Census Bureau, there are about 5 million American firms in this category(Johnston, 2003).

Most entry-level software contain features such as drop-down menus, maintenance of master file, auto-fill, to name a few(Schiff, 2002). However, these packages are ideal for bookkeeping. The cost of entry-level accounting software may range from $100 - $2,500(Johnston, 2003).  One of the most popular programs falling under this category is Quickbooks.

Quick Books

Eight out of every ten small business firms use Quickbooks. This program is most appealing to novice accounting users. One of its most outstanding components is the Register feature, which allows a user to directly record their transactions into a general ledger. For customers who are looking for efficiency in recording huge volumes of checks and deposits into their bank accounts(Schiff, 2002).

In addition, Quickbooks can provide the consumer with a hassle-free method of removing errors from accounting records. Although this may involve internal control concerns, the client can keep a more updated transaction log by setting the Audit Trail feature. Aside from that, Quickbooks has various time-saving features as well(Schiff, 2002).

On the other hand, Quickbooks will require Internet connection so a company that has no access to the Internet will not be able to use the software. Likewise, with the new version of Quickbooks, the user cannot customize the Navigation Bar to fit their liking. Aside from that, the customer would have to pay a certain amount in order to access the payroll tax table(Sleeter, 2000).

Middle Market

Companies that have total sales reaching $100 million with less than 100 employees are categorized as Small to Medium Business while firms with a regular income of $100 million and about 500 employees are Small to Medium Enterprise. In the United States, there are about 516,000 SMB and about 84,000 SME  companies based on the US Census Bureau. SMB software packages are worth between $5,000 - $40,000. For SME programs, corporate or individual clients should prepare between $10,000 - $250,000(Johnston, 2003).

ACCPAC Advantage Series

The ACCPAC Advantage Series accounting software offers the following benefits for middle market companies(ACCPAC International, n.d):

  • The software is totally accessible through a Web browser. Wherever the client is located, they can add entries or make corrections to their accounting system.
  • ACCPAC Advantage Series is user-friendly. It contains menus which the customer can customize and navigate with ease. It comes with a built-in Microsoft Visual Basic for Applications for expanding or integrating your application.
  • For companies looking to gain a competitive advantage over their competitors, ACCPAC Advantage Series provides room for quick upgrades from one version to the next as their business grows.
  • The software is likewise customized for conducting business on a global prospective. It supports various languages and can handle the most demanding international client.
  • The ACCPAC Advantage caters to the accounting needs of certain industries.

Enterprise Resource Planning

ERP programs are designed for huge companies generating sales over $500 million and over 500 employees. There are 17,000 companies characterized as ERP. Because of the sheer size of their need, ERP software packages may cost between $250,000 to $50 million(Johnston, 2003).

When it comes to the ERP category, two names will usually stand out: SAP and Oracle. These two huge companies use varying strategies in generating sales. The former is expanding its business through acquisition while SAP makes its sales through various partners and pushing products in the mid-market segment. Slowly catching up with the industry leaders is Microsoft(Maguire, 2006).

Below are the advantages of ERP accounting software(Goddard, 2007):

  1. When properly set-up and executed, ERP accounting system can cut down expenses for labor, overhead, and resources. It can enable various departments to come up with crucial decisions.
  2. ERPs can increase the productivity and quality of goods and services by helping the departments concerned in pinpointing the weaknesses which should be addressed and strengths that should be exploited.
  3. An ERP software can reduce the likelihood of industrial espionage.

While there are benefits, ERP software likewise have disadvantages:

  1. Purchasing an ERP software can be costly. Aside from that, the fee for licensing is expensive as well. Even the consultation fee for experts who will help out in setting up the program is lucrative. This is the reason why no company has been able to benefit from the advantages of this software.
  2. Most employees of companies who embraced the change to enterprise resource planning is quite hesitant to accept new challenges and tasks that the new system will bring about.
  3. Oracle, SAP, and other ERP programs are unlikely to be user friendly. While it can be modified, the process of changing the program can be costly as well. In addition, the software is prone to bugs.
  4. Furthermore, the data being accessed by a certain department can be seen by the other departments. At first, they would not be willing to share data so this becomes a hindrance to the effectivity of the software.

Conclusion

Whatever category a certain company falls, accounting software packages can be a great help to their business. Using an automated accounting system will reduce the tedious and error-prone method of manually inputting and calculating data.

When considering the kind of software to purchase, the bottom line would still have to be the budget of the company. Available resources such as manpower and equipments would also come into the picture.

Works Cited

Goddard, J.(2007 November 7). ERP Systems: Part III: Advantages & Disadvantages & the Future           of ERP. Student Web Stuff. 19 June 2008     <http://www.studentwebstuff.com/mis/showpost.php?             s=208717b479a7fd5e7b61d6d846173e04&p=22455&postcount=1>

Schiff, Andrew(2002). Small Business Accounting Software Review. Bell & Howell Information       and Learning. 19 June 2008 <http://www.onlinesoftwareguide.com/sbacct.html>

Maguire, James(2006 November 15). The Future of ERP. Datamation. 19 June 2008.             <http://www.itmanagement.earthweb.com/erp/article.php/3643966>

Johnston, Randolph(2003 September). A Strategy for Finding the Right Accounting Software.         American Institute of Certified Public Accountants. 19 June 2008.             <http://www.aicpa.org/pubs/jofa/sep2003/johnston.htm>

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Accounting Software Packages. (2018, Nov 12). Retrieved from https://phdessay.com/accounting-software-packages/

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