Accounting Programs – Let the computer take care of your finances!
Accounting programs are software, which perform functions of accounting in a business or commercial establishment. These are usually ready-to-use products marketed by various software companies. Depending on the size of the business, the nature and complexity of these programs may vary, but all of them perform more or less similar functions.
In the earlier days, accounting in a business or commercial establishment was done manually. Numerous registers, vouchers, files etc were prepared and kept by accounting staff of the organization and these were essentially hard copies. In fact, most government organizations still continue to maintain accounts in the manual form. However, with gradual increase in volume of business, growth in size of commercial establishment and setting up of large multinational corporations, manual accounting has been replaced largely by computerized form of accounting.
They are available in different variants. The simpler ones support single user or maybe multiple users within a local network of computers. These types of computer programs are of the primitive variety and are used even today by establishments like shops, traders or small commercial establishments, where the office is located in one place. These programs are based on simple logics and are usually capable of data storage up to a limited extent.
There are two major disadvantages of this type.
1. Limited or no flexibility: Simple accounting programs usually have restricted data handling and/or storage capacity. Hence these types of programs can prove to be very risky, where business expansion happens or is likely to happen.
2. Limited reporting options: One of the key advantages of using an accounting program is its capacity to generate or create multiple, user defined reports. These reports can be of different types like sales reports, budget vs. actual analysis, profit and loss and cash flow statements etc, etc. Simple programs usually have limited reporting options like Trial Balance, Cash Book, Sales or Purchase Register etc, but more complicated ones are normally not available. Moreover, these simple programs do not have the customization options, i.e. the possibility to create user-defined reports almost do not exist.
Now let us discuss more about the modern day, advanced accounting in more detail. These are very costly, complicated and only large multinational corporations can afford to use them. These types enable thousands of individuals to work simultaneously and often can be accessed from different locations. Modern day accounting software have practically unlimited data storage capacities.
Two principal categories of such software are:
*Mainframe based accounting programs and
*ERP (Enterprise Resource Planning) based accounting programs.
Mainframe accounting programs are typically a product of IBM Mainframe systems. These programs are hosted in the main server, usually located in the corporate headquarters of the company. The sheer size and complexity of such programs are often awe-inspiring. Mainframe accounting programs are extremely fast and even in spite of the fact that thousands of workers may access and use such programs simultaneously, it would continue to operate at lightning speeds. The data storage capabilities are practically limitless and can be easily upgraded and extended as per business requirements. However, such programs usually cost up to few million dollars and therefore can be afforded only by the large multi national corporations.
ERP accounting programs are still an improved variant of mainframes. It is based on modular technology and unlike mainframe programs, which have structured data storage and handling patterns; these can be altered easily as per the requirement of the individual users. Speed wise, such programs operate at lightning speeds. ERP accounting programs like Oracle or SAP have become the preferred accounting options for almost all the leading business houses of the world. Needless to say, the cost involved around acquiring, maintaining and using such programs is astounding.