Accounting software describes a type of application software that records and processes accounting transactions within functional modules such as accounts payable, accounts receivable, general ledger and trial balance. It functions as an accounting information system, it may be developed in-house by the organization using it, may be purchased from a third party, or may be a combination of a third-party application software package with local modifications. Accounting software may be on-line based, accessed anywhere at any time with any device, Internet enabled, or may be desktop based, it varies in its complexity and cost. The market has been undergoing considerable consolidation since the mid-1990s, with many suppliers ceasing to trade or being bought by larger groups. Accounting software is composed of various modules, different sections dealing with particular areas of accounting. Among the most common are: Core modulesAccounts receivable—where the company enters money received Accounts payable—where the company enters its bills and pays money it owes General ledger—the company's "books" Billing—where the company produces invoices to clients/customers Stock/inventory—where the company keeps control of its inventory Purchase order—where the company orders inventory Sales order—where the company records customer orders for the supply of inventory Bookkeeping—where the company records collection and payment Financial Close Management — where accounting teams verify and adjust account balances at the end of a designated time periodNon-core modulesDebt collection—where the company tracks attempts to collect overdue bills Electronic payment processing Expense—where employee business-related expenses are entered Inquiries—where the company looks up information on screen without any edits or additions Payroll—where the company tracks salary and related taxes Reports—where the company prints out data Timesheet—where professionals record time worked so that it can be billed to clients Purchase requisition—where requests for purchase orders are made and tracked Reconciliation—compares records from parties at both sides of transactions for consistency Drill down Journals Departmental accounting Support for value added taxation Calculation of statutory holdback Late payment reminders Bank feed integration Document attachment system Document/Journal approval systemNote that vendors may use differing names for these modules.
In many cases, implementation can be a bigger consideration than the actual software chosen when it comes down to the total cost of ownership for the business. Most midmarket and larger applications are sold through resellers and consultants; those organizations pass on a license fee to the software vendor and charge the client for installation and support services. Clients can count on paying 50-200% of the price of the software in implementation and consulting fees. Other organizations consult with and support clients directly, eliminating the reseller. Accounting software provides many benefits such as speed up the information retrieval process, bring efficiency in Bank reconciliation process, automatically prepare Value Added TAX / Goods and Services TAX, most provide the opportunity to see the real-time state of the company’s financial position. Personal accounting software is targeted towards home users, supporting accounts payable-type accounting transactions, managing budgets, simple account reconciliation, at the inexpensive end of the market.
At the low-end of the business markets, inexpensive applications software allows most general business accounting functions to be performed. Suppliers serve a single national market, while larger suppliers offer separate solutions in each national market. Many of the low end products are characterized by being "single-entry" products, as opposed to double-entry systems seen in many businesses; some products are not considered GAAP or IFRS/FASB compliant. Some low-end systems do not have audit trails; the mid-market covers a wide range of business software that may be capable of serving the needs of multiple national accountancy standards and allow accounting in multiple currencies. In addition to general accounting functions, the software may include integrated or add-on management information systems, may be oriented towards one or more markets, for example with integrated or add-on project accounting modules. Software applications in this market include the following features: Industry-standard robust databases Industry-standard reporting tools Tools for configuring or extending the application, access to program code.
The most complex and expensive business accounting software is part of an extensive suite of software known as enterprise resource planning software. These applications have a long implementation period greater than six months. In many cases, these applications are a set of functions which require significant integration and customization to begin to resemble an accounting system. Many freeware high-end open-source accounting software are available online these days which aim to change the market dynamics. Most of these software solutions are web-based; the advantage of a high-end solution is that these systems are designed to support individual company specific processes, as they are customizable and can be tailored to exact business requirements. This comes at a significant cost in terms of m
Credit is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party but promises either to repay or return those resources at a date. In other words, credit is a method of making reciprocity formal enforceable, extensible to a large group of unrelated people; the resources provided may be financial. Credit encompasses any form of deferred payment. Credit is extended by a creditor known as a lender, to a debtor known as a borrower; the term "credit" was first used in English in the 1520s. The term came "from Middle French crédit "belief, trust," from Italian credito, from Latin creditum "a loan, thing entrusted to another," from past participle of credere "to trust, believe"." The commercial meaning of "credit" "was the original one in English" The derivative expression "credit union" was first used in 1881 in American English. Bank-issued credit makes up the largest proportion of credit in existence; the traditional view of banks as intermediaries between savers and borrower is incorrect.
Modern banking is about credit creation. Credit is made up of two parts, the credit and its corresponding debt, which requires repayment with interest; the majority of the money in the UK economy is created as credit. When a bank issues credit, it writes a negative entry into the liabilities column of its balance sheet, an equivalent positive figure on the assets column; when the debt is repaid, the credit and debt are cancelled, the money disappears from the economy. Meanwhile, the debtor receives a positive cash balance, but an equivalent negative liability to be repaid to the bank over the duration. Most of the credit created goes into the purchase of land and property, creating inflation in those markets, a major driver of the economic cycle; when a bank creates credit, it owes the money to itself. If a bank issues too much bad credit, the bank will become insolvent; that the bank never had the money to lend in the first place is immaterial - the banking license affords banks to create credit - what matters is that a bank's total assets are greater than its total liabilities, that it is holding sufficient liquid assets - such as cash - to meet its obligations to its debtors.
If it fails to do this it risks bankruptcy. There are two main forms of private credit created by banks. To reduce their exposure to the risk of not getting their money back, banks will tend to issue large credit sums to those deemed credit-worthy, to require collateral. In this instance, the bank uses sale of the collateral to reduce its liabilities. Examples of secured credit include consumer mortgages used to buy houses, boats etc. and PCP credit agreements for automobile purchases. Movements of financial capital are dependent on either credit or equity transfers; the global credit market is three times the size of global equity. Credit is in turn dependent on the reputation or creditworthiness of the entity which takes responsibility for the funds. Credit is traded in financial markets; the purest form is the credit default swap market, a traded market in credit insurance. A credit default swap represents the price at which two parties exchange this risk – the protection seller takes the risk of default of the credit in return for a payment denoted in basis points of the notional amount to be referenced, while the protection buyer pays this premium and in the case of default of the underlying, delivers this receivable to the protection seller and receives from the seller the par amount.
There are many types of credit, including but not limited to bank credit, consumer credit, investment credit, international credit, public credit and real estate. In commercial trade, the term "trade credit" refers to the approval of delayed payment for purchased goods. Credit is sometimes not granted to a buyer who has financial difficulty. Companies offer trade credit to their customers as part of the terms of a purchase agreement. Organizations that offer credit to their customers employ a credit manager. Consumer debt can be defined as "money, goods or services provided to an individual in the absence of immediate payment". Common forms of consumer credit include credit cards, store cards, motor vehicle finance, personal loans, consumer lines of credit, payday loans, retail loans and mortgages; this is a broad definition of consumer credit and corresponds with the Bank of England's definition of "Lending to individuals". Given the size and nature of the mortgage market, many observers classify mortgage lending as a separate category of personal borrowing, and
A spreadsheet is an interactive computer application for organization and storage of data in tabular form. Spreadsheets developed as computerized analogs of paper accounting worksheets; the program operates on data entered in cells of a table. Each cell may contain either numeric or text data, or the results of formulas that automatically calculate and display a value based on the contents of other cells. A spreadsheet may refer to one such electronic document. Spreadsheet users can observe the effects on calculated values; this makes the spreadsheet useful for "what-if" analysis since many cases can be investigated without manual recalculation. Modern spreadsheet software can have multiple interacting sheets, can display data either as text and numerals, or in graphical form. Besides performing basic arithmetic and mathematical functions, modern spreadsheets provide built-in functions for common financial and statistical operations; such calculations as net present value or standard deviation can be applied to tabular data with a pre-programmed function in a formula.
Spreadsheet programs provide conditional expressions, functions to convert between text and numbers, functions that operate on strings of text. Spreadsheets have replaced paper-based systems throughout the business world. Although they were first developed for accounting or bookkeeping tasks, they now are used extensively in any context where tabular lists are built and shared. LANPAR, available in 1969, was the first electronic spreadsheet on mainframe and time sharing computers. LANPAR was an acronym: LANguage for Programming Arrays at Random. VisiCalc was the first electronic spreadsheet on a microcomputer, it helped turn the Apple II computer into a popular and used system. Lotus 1-2-3 was the leading spreadsheet. Excel now has the largest market share on the Macintosh platforms. A spreadsheet program is a standard feature of an office productivity suite. Web based spreadsheets are a new category. A spreadsheet consists of a table of cells arranged into rows and columns and referred to by the X and Y locations.
X locations, the columns, are represented by letters, "A", "B", "C", etc. while rows are represented by numbers, 1, 2, 3, etc. A single cell can be referred to by addressing its column, "C10" for instance; this electronic concept of cell references was first introduced in LANPAR and a variant used in VisiCalc, known as "A1 notation". Additionally, spreadsheets have the concept of a range, a group of cells contiguous. For instance, one can refer to the first ten cells in the first column with the range "A1:A10". LANPAR innovated forward referencing/natural order calculation which didn't re-appear until Lotus 123 and Microsoft's MultiPlan Version 2. In modern spreadsheet applications, several spreadsheets known as worksheets or sheets, are gathered together to form a workbook. A workbook is physically represented by a file, containing all the data for the book, the sheets and the cells with the sheets. Worksheets are represented by tabs that flip between pages, each one containing one of the sheets, although Numbers changes this model significantly.
Cells in a multi-sheet book add the sheet name to their reference, for instance, "Sheet 1! C10"; some systems extend this syntax to allow cell references to different workbooks. Users interact with sheets through the cells. A given cell can hold data by entering it in, or a formula, created by preceding the text with an equals sign. Data might include the string of text hello world, the number 5 or the date 16-Dec-91. A formula would begin with the equals sign, =5*3, but this would be invisible because the display shows the result of the calculation, 15 in this case, not the formula itself; this may lead to confusion in some cases. The key feature of spreadsheets is the ability for a formula to refer to the contents of other cells, which may in turn be the result of a formula. To make such a formula, one replaces a number with a cell reference. For instance, the formula =5*C10 would produce the result of multiplying the value in cell C10 by the number 5. If C10 holds the value 3 the result will be 15.
But C10 might hold its own formula referring to other cells, so on. The ability to chain formulas together is. Many problems can be broken down into a series of individual mathematical steps, these can be assigned to individual formulas in cells; some of these formulas can apply to ranges as well, like the SUM function that adds up all the numbers within a range. Spreadsheets share many principles and traits of databases, but spreadsheets and databases are not the same thing. A spreadsheet is just one table, whereas a database is a collection of many tables with machine-readable semantic relationships between them. While it is true that a workbook that contains three sheets is indeed a file containing multiple tables that can interact with each other, it lacks the relational structure of a database. Spreadsheets and databases are interoperable—sheets can be imported into databases to become tables within them, database queries can be exported into spreadsheets for further analysis. A spreadsheet program is one of the main components of an office productivity suite, which also contains a word processor, a presentation program, a database management system.
Programs within a suite use similar commands for similar functions. Sharing data between the components is easier tha
Accounting or accountancy is the measurement and communication of financial information about economic entities such as businesses and corporations. The modern field was established by the Italian mathematician Luca Pacioli in 1494. Accounting, called the "language of business", measures the results of an organization's economic activities and conveys this information to a variety of users, including investors, creditors and regulators. Practitioners of accounting are known as accountants; the terms "accounting" and "financial reporting" are used as synonyms. Accounting can be divided into several fields including financial accounting, management accounting, external auditing, tax accounting and cost accounting. Accounting information systems are designed to support related activities. Financial accounting focuses on the reporting of an organization's financial information, including the preparation of financial statements, to the external users of the information, such as investors and suppliers.
The recording of financial transactions, so that summaries of the financials may be presented in financial reports, is known as bookkeeping, of which double-entry bookkeeping is the most common system. Accounting is facilitated by accounting organizations such as standard-setters, accounting firms and professional bodies. Financial statements are audited by accounting firms, are prepared in accordance with accepted accounting principles. GAAP is set by various standard-setting organizations such as the Financial Accounting Standards Board in the United States and the Financial Reporting Council in the United Kingdom; as of 2012, "all major economies" have plans to converge towards or adopt the International Financial Reporting Standards. The history of accounting is thousands of years old and can be traced to ancient civilizations; the early development of accounting dates back to ancient Mesopotamia, is related to developments in writing and money. By the time of Emperor Augustus, the Roman government had access to detailed financial information.
Double-entry bookkeeping was pioneered in the Jewish community of the early-medieval Middle East and was further refined in medieval Europe. With the development of joint-stock companies, accounting split into financial accounting and management accounting; the first work on a double-entry bookkeeping system was published by Luca Pacioli. Accounting began to transition into an organized profession in the nineteenth century, with local professional bodies in England merging to form the Institute of Chartered Accountants in England and Wales in 1880. Both the words accounting and accountancy were in use in Great Britain by the mid-1800s, are derived from the words accompting and accountantship used in the 18th century. In Middle English the verb "to account" had the form accounten, derived from the Old French word aconter, in turn related to the Vulgar Latin word computare, meaning "to reckon"; the base of computare is putare, which "variously meant to prune, to purify, to correct an account, hence, to count or calculate, as well as to think."The word "accountant" is derived from the French word compter, derived from the Italian and Latin word computare.
The word was written in English as "accomptant", but in process of time the word, always pronounced by dropping the "p", became changed both in pronunciation and in orthography to its present form. Accounting has variously been defined as the keeping or preparation of the financial records of an entity, the analysis and reporting of such records and "the principles and procedures of accounting". Accountancy refers to the occupation or profession of an accountant in British English. Accounting has several subfields or subject areas, including financial accounting, management accounting, auditing and accounting information systems. Financial accounting focuses on the reporting of an organization's financial information to external users of the information, such as investors, potential investors and creditors, it calculates and records business transactions and prepares financial statements for the external users in accordance with accepted accounting principles. GAAP, in turn, arises from the wide agreement between accounting theory and practice, change over time to meet the needs of decision-makers.
Financial accounting produces past-oriented reports—for example the financial statements prepared in 2006 reports on performance in 2005—on an annual or quarterly basis about the organization as a whole. This branch of accounting is studied as part of the board exams for qualifying as an actuary; these two types of professionals and actuaries, have created a culture of being archrivals. Management accounting focuses on the measurement and reporting of information that can help managers in making decisions to fulfill the goals of an organization. In management accounting, internal measures and reports are based on cost-benefit analysis, are not required to follow the accepted accounting principle. In 2014 CIMA created the Global Management Accounting Principles; the result of research from across 20 countries in five continents, the principles aim to guide best practice in the d