Types of Accounting Software

Not every business needs the same kind of accounting software — the right choice depends on the size of the business, the complexity of its operations, and how much it can afford to spend on customisation. Accounting software is usually grouped into three broad types.

• Ready-to-use software. A standard package developed for general use, requiring little or no modification before installation. It is the cheapest and quickest to set up, and suits a small trader or a shop whose accounting requirements are fairly standard — an inexpensive, widely used Indian accounting package that lets a small business record vouchers, maintain ledgers and generate a trial balance and final accounts with minimal setup is a good real-world example of ready-to-use software.
• Customised software. A ready-made base package that is modified to fit a specific business's particular requirements — for example, adding an industry-specific report format, or linking the accounting data to a separate billing or inventory system already in use. It costs more than ready-to-use software because of the modification effort, and suits a medium-sized business with some requirements the standard package does not cover.
• Tailor-made (or tailored) software. Software developed from the ground up to meet the unique, often complex, requirements of one particular organisation — commonly a large business or group of companies with multiple locations, several user levels and non-standard reporting needs. It is the most expensive and time-consuming to develop and maintain, but gives the business complete control over how the system works.