Types of Accounting Software

Businesses do not all have the same accounting needs — a small trader's requirements are very different from those of a large manufacturing company — so accounting software is generally available in three broad types, distinguished mainly by how far the software is adapted to a particular organisation's own way of working.

1. Ready-to-use software. This is a standard, off-the-shelf package designed to suit the common accounting needs of a wide range of small and medium businesses, without any modification for a specific user. It is the least expensive option and the easiest to start using immediately, but it offers the least flexibility — a business whose requirements differ from the standard pattern the software was built for simply has to work within its existing features.

2. Customised software. This starts from a ready-to-use base but is then modified to match the specific requirements of a particular organisation — for example, adding a company's own voucher formats, special reports, or an unusual method of stock valuation the standard package does not offer. Customisation costs more than a plain ready-to-use package and needs some lead time to implement, but it fits the business far more closely.

3. Tailor-made software. This is developed from scratch, exclusively for one organisation with genuinely unique requirements that no standard or customised package can meet — for instance, software built specifically for a large bank, a railway reservation system, or a big manufacturing enterprise with a very particular production and costing structure. It is by far the most expensive and time-consuming option, but it can be built to match the organisation's processes exactly.