Comprehensive Guide to Accounting Software: Choosing and Establishing an Accounting System
The Complete Accounting Software Guide: Types, Selection Criteria, and a No-Surprises Implementation Plan
This accounting software guide explains how to use technology and governance to improve operations, raise data and reporting quality, and reduce risk—on DigitalSalla. The key idea: not every system fits every company. A fair comparison must be based on requirements, controls, and total cost of ownership (TCO) — not the subscription price alone.
- A clear map of solution types (Accounting / ERP / Cloud accounting / Invoice & expense management).
- A must-have checklist + built-in control requirements (roles, segregation of duties, audit trail).
- A practical way to classify options early so you don’t waste time on “similar-looking” demos.
- A scorecard template + vendor questions that reduce implementation risk.
- A short implementation plan + a simple, on-page TCO calculator.
- Accounting Software Selection for Your Company
- Financial Accounting Software: Advanced Features That Matter
- Accounting Information Systems: Technology, Controls, and Reporting
- Safe Transition to Accounting ERP Systems (Migration Playbook)
- Establishing an Accounting System: Essential Setup Steps
- Cost Center Chart Design Guide (Great for department reporting)
- How Accounting Systems Support Compliance (Tax, Audit Trail, E-invoicing)
- Financial Variance Analysis (Budget vs Actual + Root-Cause)
- Accounting Software for Dashboards & KPI-Driven Financial Analysis
- Tax Accounting: How It Works and Why It Matters
1) Quick map: what do we mean by “accounting software”?
“Accounting software” is a broad label that covers tools with very different depth. As systems become deeper, they gain stronger control, integration, and reporting— and they also require tighter governance and cleaner implementation.
2) Main types: Accounting vs ERP vs invoice/workflow tools
This practical comparison helps you classify options early—before you spend time on demos that look similar on the surface.
| Type | Best use | Signals it’s a good fit |
|---|---|---|
| Accounting system | GL + invoicing + AR/AP + banking + reporting | Small/medium business with relatively straightforward operations |
| Bookkeeping tool | Lightweight daily recording | Early-stage need + limited transaction volume |
| ERP | Run operations & integrate (procurement/inventory/production/branches) | Strong integration needs + approvals + formal workflows |
| Invoice & expense management | Approval workflows + archiving + posting integration | High expense volume + multiple approvals + frequent audits |
| Cloud accounting | Flexible access and fast scaling | Remote teams/branches + desire to reduce IT overhead |
3) Must-have requirements inside any system
Don’t start with “nice-to-have” items (themes, UI colors). Start with what builds reliable financial statements and supports auditability.
| Feature | Why it matters | Quick validation question |
|---|---|---|
| Flexible chart of accounts | Builds reporting structure and reduces manual entries | Does it support cost centers/projects/branches? |
| General ledger + journal workflow | Single source of truth for statements | Is there sequencing/numbering + a clear trail? |
| AR/AP + aging | Improves collections and payment discipline | Do you get aging and follow-up reports? |
| Banking & reconciliation | Reduces cash differences and surprises | Is reconciliation auditable with who/when/what changed? |
| Tax & compliance outputs | Reduces penalties and reporting gaps | Does it support required rates, forms, and exports? |
| Period lock | Prevents changes after close | Are exceptions approval-based with a log? |
| Attachments & archiving | Speeds up audits and evidence retrieval | Can you attach docs to every entry/invoice? |
4) Governance & audit: roles + SoD + audit trail
The “best” system is the one that embeds controls in the product—rather than relying on manual supervision. These requirements should be part of your selection criteria, especially if you have multiple users and approvals.
Financial Statements Builder - Excel File
4.1 Role-based access control (RBAC)
- Clear roles: entry / review / approval / reporting / user administration.
- Least-privilege principle + periodic user access reviews.
4.2 Segregation of duties (SoD) in high-risk points
- Vendor creator ≠ vendor approver ≠ payment executor.
- Journal creator ≠ close approver.
- User admin rights should not be combined with payment approval rights.
4.3 A trustworthy audit trail
- Who created/edited/deleted + date/time + before/after values.
- Track sensitive changes: bank accounts, credit limits, tax setup, system settings.
- Ability to export logs and retain them under your policy.
5) Cloud vs on-prem (and when hybrid makes sense)
This isn’t “cloud is always better.” The right decision is the one that delivers: continuity + security + auditability + a reasonable TCO.
| Factor | Cloud | On-Prem |
|---|---|---|
| Time to go-live | Usually faster | Often slower due to infrastructure |
| Scalability | Flexible (users/branches) | Requires server/network expansion |
| IT overhead | Often lower | Higher (patching/backups/security) |
| Data control | Depends on contract + hosting region | Direct, internal control |
6) Data & integrations: API, import/export, and BI
In real life, integration quality decides whether the system reduces work—or creates new manual work. Before you buy, test three paths: import, export, and connecting to external tools.
6.1 Non-negotiable integration questions
- Is there an official API? What are read/write limits?
- Does it support import/export for COA, customers/vendors, opening balances, and journals?
- Can you connect reporting to BI or dashboards? Start here: Accounting Software for Dashboards & KPIs
7) Security & compliance: where risk actually sits
The biggest risk isn’t only “where it’s hosted”—it’s access, exports, and integrations. Many incidents happen due to excessive permissions or unmanaged data sharing.
7.1 Contract clauses tied to compliance
- Data residency and whether you can choose the region.
- Log retention and the ability to export audit logs.
- Exit plan: full export + secure deletion + grace period.
8) Total cost of ownership (TCO) + a simple calculator
The right comparison isn’t just a “monthly subscription.” Include: implementation, training, integrations, internal resources for governance, and potential downtime costs.
9) Scorecard template + vendor questions
Use a scorecard to avoid “demo bias.” Rate each criterion (1–5) and multiply by weight. For a full selection method, see: Accounting Software Selection for Your Company.
| Criterion | Suggested weight | How to test quickly |
|---|---|---|
| Functional fit | 30% | Demo using your workflows (invoice → bank → close → reporting) |
| Controls & governance | 20% | Roles + SoD + audit trail + period locks |
| Reporting & analysis | 15% | Report flexibility + exports + dashboards |
| Integrations & data | 15% | API + import/export + migration templates |
| Support & delivery | 10% | SLA + implementation plan + customer references |
| TCO (3 years) | 10% | Subscription + implementation + training + internal effort |
- What is the backup and restore policy? Is restore tested periodically?
- Can audit logs be exported? What is the retention period?
- What is the exit plan (data export)? Which formats are supported?
- What is included in the subscription vs billed as an add-on?
- Can updates break customizations/reports? How are changes communicated in advance?
10) A short implementation plan + common mistakes
- Define requirements: modules/branches/users/critical reports.
- Design controls: roles + SoD + period locks + approvals/workflows.
- Trial migration: sample data + opening balance reconciliation.
- Pilot: run one month on a limited scope.
- Go-live: full rollout + exception monitoring for 6–8 weeks.
If your scope includes ERP-level deployment or serious change management, start with the migration playbook: Safe Transition to Accounting ERP Systems. For a clean setup baseline: Establishing an Accounting System.
Common (and expensive) mistakes
- Dirty migration data: breaks the first close and creates recurring variances.
- Over-broad permissions: fraud risk + unclear accountability.
- Integrations without governance: API writes/edits without review.
- No documented procedures: each employee works differently → unstable results.
11) FAQ + final checklist
Should I start with an accounting system or an ERP?
If operations are simple and your focus is accounting + reporting, an accounting system is often enough. If you have branches/inventory/approvals/large integrations, consider an ERP-level path: Safe Transition to Accounting ERP Systems.
What are the top 3 governance requirements inside the system?
(1) Role-based permissions, (2) segregation of duties at risk points, (3) audit trail + period locks with approval-based exceptions. For compliance framing: Accounting Systems & Compliance.
How do I make sure a cloud system is safe?
Focus on real controls: tight permissions, clear export policies, monitored integrations, and contractual clauses (logs/backup/exit). Start here: Accounting Information Systems.
- Requirements brief + 10 critical reports.
- Demo on your scenario (not a generic tour).
- Test roles/SoD/audit trail/period locks.
- API + import/export + migration scenario.
- SLA + backup/restore + exit plan (export).
- 3-year TCO (implementation/training/internal effort).
- Run a pilot before company-wide rollout.