Accounting software (definition)
Accounting software is software that does various accounting and bookkeeping tasks. It stores a business’s financial data, and is often used to perform business transactions.
Most modern accounting software is always connected to the internet. This means you can connect from any internet-capable device, like your laptop or smartphone. This online space where you can access your data is called the cloud. Online accounting software automatically receives and updates because it’s always connected to the internet.
Different kinds of accounting software do different things. Most of them automatically enter, store and analyse data for you. This is especially useful for saving time on tasks like bank reconciliation. Accounting software also offers useful tools like invoicing, bill payment, payroll, and financial reporting.
This glossary is for small business owners. The definitions are written with their requirements in mind. More detailed definitions can be found in accounting textbooks or from an accounting professional. Xero does not provide accounting, tax, business or legal advice.