Sourcing of Accounting Software

Accounting software is an integral part of the computerised accounting

system. An important factor to be considered before acquiring accounting

software is the accounting expertise of people responsible in organisation

for accounting work. People, not computers, are responsible for accounting.

The need for accounting software arises in two situations : (a) when the

computerised accounting system is implemented to replace the manual

system or (b) when the current computerised system needs to be replaced

with a new one in view of changing needs.

1 Accounting Packages

Every Computerised Accounting System is implemented to perform the

accounting activity (recording and storing of accounting data) and generate

reports as per the requirements of the user. From this perspective.

The accounting packages are classified into the following categories :

(a) Ready to use

(b) Customised

(c) Tailored

Each of these categories offers distinctive features. However, the choice of

the accounting software would depend upon the suitability to the organisation

especially in terms of accounting needs.

2 Ready-to-Use

Ready-to-Use accounting software is suited to organisations running small/

conventional business where the frequency or volume of accounting

transactions is very low. This is because the cost of installation is generally

low and number of users is limited. Ready-to-use software is relatively easier

to learn and people (accountant) adaptability is very high. This also implies

that level of secrecy is relatively low and the software is prone to data frauds.

The training needs are simple and sometimes the vendor (supplier of software)

offers the training on the software free. However, these software offer little

scope of linking to other information systems.

3 Customised

Accounting software may be customised to meet the special requirement of

the user. Standardised accounting software available in the market may not

suit or fulfil the user requirements. For example, standardised accounting

software may contain the sales voucher and inventory status as separate

options. However, when the user requires that inventory status to be updated

immediately upon entry of sales voucher and report be printed, the software

needs to be customised. Customised software is suited for large and medium businesses and can be

linked to the other information systems. The cost of installation and maintenance

is relatively high because the high cost is to be paid to the vendor for

customisation. The customisation includes modification and addition to the

software contents, provision for the specified number of users and their

authentication, etc. Secrecy of data and software can be better maintained in

customised software. Since the need to train the software users is important, the

training costs are therefore high.

4 Tailored

The accounting software is generally tailored in large business organisations

with multi users and geographically scattered locations. These software requires

specialised training to the users. The tailored software is designed to meet the

specific requirements of the users and form an important part of the organisational

MIS. The secrecy and authenticity checks are robust in such softwares and they

offer high flexibility in terms of number of users.

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