An Internet search for the term ‘accounting software’ generates more than 37 million results. That doesn’t mean there are so many accounting programs available to choose from. But there are quite a few! The guy from the one-man auto repair shop searches the Internet on the term “accounting software” as does the controller in a manufacturing operation with 500+ employees. While both people are looking for software, what they need are two completely different software packages. In general, accounting software falls into three categories. Once you understand the categories, it can be much easier to find a package that suits your business.

Start

Small businesses or those just starting out can purchase basic accounting software online or in retail stores at relatively low prices these days. These programs are made to be simple and quick to set up and get started. They typically include general ledger, accounts payable and receivable functions, and standard financial reporting. Some of the limitations found in the starter software are limits placed on data capacity. You may only be able to enter a certain number of customers, companies, invoices, years of history, or other information. Once capacity is reached, you will need to move to another system. It can also bypass some of the standard boot system functionality. Software features such as costing methods, inventory capabilities, and multi-company management are just a few of the reasons people need to upgrade to a system that can handle their growing needs.

middle market

Once you start to see the signs that you are outgrowing your starter accounting system, the next step is a mid-market accounting system. Mid-market systems can offer many of the features that are missing from more basic systems. Multi-company management, customizable reports, and your choice of costing methods are just some of the more robust features a midmarket system can offer. So if you find yourself outgrowing the basic system, or even if you’re starting out with more complex needs than a basic system can handle, mid-market accounting software is where you should look.

Advanced

For large companies, an advanced accounting system is a must. Advanced accounting software usually comes with a wide variety of robust features, and they often sell the software open source, which means that their software code can be modified for the company that buys it. While this is exponentially more expensive than a standard system, large companies often require it in order for the system to work the way their business works. Features like multi-currency management and custom data import/export, just to name a few, can be found in advanced accounting software.

Knowing the three basic categories can help you understand where to start your search, based on your business needs. It can also help you find a product that’s right for you, instead of paying too much or too little for your business needs. Narrow your search to find the best system for your business.