Accounting software is application software used for maintaining account transactions such as payroll, general ledger, billing, sales order, purchase order etc. This software can be developed in-house or can be purchased from the third party. Accounting software is also termed as AIS (Accounting Information System).

We all are aware of the fact that accounting software is used in many sectors such as banking, retail, medical sector, and construction sector, private and governmental organizations to keep track of all the account transactions. Earlier we use to have “Traditional accounting system”, which has many limitations. All these limitations were eradicated with the introduction of new accounting software.

This software has record keeping or bookkeeping programs which help a bookkeeper to perform his task efficiently. Bookkeeping is also referred to as record keeping which means the process of recording transactions related to finance or financial transactions.

In continuation of my last article, that covered year-end closing activities related to receivables, I have listed year-end activities related to payables here.

Ø  Accrual of Expenses & Taxes (Payroll, Rent, Utilities, Property Tax & Sales Tax)

Many small businesses either maintain their books on cash basis or do not accrue important expenses like rent, wages etc. on a monthly basis. Hence year-end accruals are a necessary step. Also, accruals done for previous months need to be reversed in the current month.

Most of the organisations in UK are employing Payroll Accounting Software to ensure the full control over the vital process of payroll computation. These payroll software packages are designed to keep track pf salary, taxes related to the wages, late payments, new starters, leavers and other supplementary payments. Such accounting software can either be developed in-house by the organisation using it or can even be purchased from the third party with some local modifications.