Virtually all integrated accounting and enterprise resource planning applications include capabilities for accounts receivable and accounts payable (the few exceptions are those accounting systems aimed solely at cash-based businesses). The integrated accounting application may be sold in software modules or it may include all accounting functions in one package.
The all-in-one package can be quicker to install. But this one-size-fits-all approach doesn’t necessarily work any better in accounting software than it does for women’s pantyhose. This means it could take longer to configure the software to fit your business figures if you aren’t “average.” In addition, you may receive some accounting functions that are not applicable to your business, which you and your staff will need to ignore.
Some of the all-in-one accounting systems aimed at small to midsize businesses come in several different editions. Typically, some editions offer greater depth of functionality within certain accounting areas or permit a larger number of users. Intuit’s QuickBooks accounting software is an example of an all-in-one integrated accounting package that comes in four different packaged software editions. All editions of QuickBooks cover a broad range of accounting functions. The higher-end editions add more depth in various areas and also support more users. Note that you’ll need to acquire a separate software license for each user. So if you have three employees who need access to AR and one to AP, you’ll require four QuickBooks licenses and will need to use a Pro or higher level edition.
Unlike QuickBooks and other all-in-one packages, module-based accounting systems conveniently let you pick and choose which accounting functions you wish to automate. You may purchase just the modules you require now and add others at a later date.
With module-based systems, data generated by one accounting module can be automatically transferred to another accounting module, provided both modules belong to the same integrated accounting system. For example, the cash collected in the accounts receivable module could be carried over to the cash management module. You generally cannot receive the benefits of data integration if you mix and match modules from different accounting systems because data transfer file formats are usually incompatible between different proprietary accounting systems. However, some third-party developers sell accounting modules with enhanced capabilities that are designed to be compatible and integrate with popular general accounting systems.
Check to see which accounting capabilities are included in the software modules you desire and find out if their operations are dependant upon other modules. The accounting functions that one software developer includes in one module may be allocated among two or three modules by another mastermind. Similarly, in order to use the accounts payable module, the accounting system may have software prerequisites that require purchase and installation of other modules, such as system management and general ledger.