Back in the 1980s, accounting was done manually. With the advances in technology, this process has been automated and improved. Businesses of all sizes are now using financial management software to streamline accounting processes and reduce human error. The different types of accounting packages available today can accomplish a variety of tasks, from data entry to e-filing and reporting. They can be integrated with other IT systems, such as CRM software or e-commerce platforms, for enhanced functionality. Some support complex operations like electronic payments, stock control and value-added tax schemes.

Choosing the best financial management software depends on your company's size and needs. For example, you can opt for custom-built accounting solutions, industry-specific solutions or software with add-on modules.

Enterprise Accounting Software

Enterprise accounting software is a type of business software designed for large organizations, banks and financial companies. It has advanced security features and can handle complex accounting tasks, such as point of sale operations, customer relationship management and advanced reporting. Think of it as an all-in-one system that can streamline the most time-consuming tasks.

The downside is that you will need to hire and train employees, so they use the program to its fullest potential. Although it's an extra expense, it will save you time in the long run and help your organization avoid costly mistakes. Popular options include Odoo, Intacct, QuickBooks Enterprise and Microsoft Dynamics GP.

Cloud Accounting Software

Most business owners are familiar with Xero, Sage 50, Quickbooks, Freshbooks and other cloud accounting packages. These programs are available online and are accessible through the cloud. They appeal to startups and small enterprises, offering flexibility and cost efficiency.

Compared to database accounting software, cloud solutions are easier to implement, more accessible but less secure. After you enter the required information, your data is sent to the cloud and then processed. All operations are performed on remote servers, which allows users to access data on the go and share it with other departments within the organization.

Payroll and Accounting Software

Payroll and accounting software is a type of financial management software that appeals to small companies. Your accounting department can use it to calculate bonuses, generate payslips and automate year-end reporting. They can also link it to timesheet systems to record employee attendance and streamline payroll calculations.

Furthermore, these programs can store your company's financial data and provide forecasts. Some have advanced reporting capabilities and may help reduce the need to understand tax legislation. Because of their simplicity, they are an easy target for cybercriminals and carry a higher risk of data loss and theft.

Installed Accounting Software

Some accounting packages are available on CDs and DVDs, making them ideal for startups and small companies with a slow or limited internet connection. These programs are easy to install but difficult to customize and use remotely. Since the data is stored on physical devices, it cannot be shared with other departments within your organizations.

Commercial Off-the-Shelf (COTS) Software

COTS software is built and delivered via a third-party vendor. It's one of the most popular options for companies worldwide, featuring advanced reporting and error detection capabilities. Most accounting packages in this category are designed for specific industries.

This type of business software appeals to large companies. It usually comes with pre-built settings and cannot be customized. Some programs are available online, which allows users to access them through the vendor's website.

Solopreneurs and small companies can opt for basic accounting packages, such as invoicing software. Zoho Invoice, and Harvest are just a few examples. Another option is micro-business software like Zoho Books and Sage One. These programs can handle tax tracking, double-entry accounting and other simple tasks.