The market of accounting software have been increasing at a fast pace. It has gone through takeover and consolidation since the mid 1990s. It has seen great competition with the entry of larger players such as Microsoft and Sage.

The main operation of an accounting software is to record and process accounting transactions of a business within its functional modules. An accounting software is all about accounting software system. There are great variations in the cost and complexity of an accounting software. An organization can either build its own accounting software or can purchase it from a third party.

There are various functional modules of an accounting software such as they can be divided in to various sections of accounting. The most common of the core modules are as follows:

1) General ledger which is known to be the company's financial "books".
2) Stock/Inventory section keeps track of the inventory of the company.
3) In the Accounts Payable section, the company enters its bills and pays money of owes.
4) In the Accounts Receivable section, money received is entered.
5) Billing is the section where the company produces invoices to clients.

Some of the non-core modules are as follows:

1) In the Debt Collection module, the company records attempts to collect the overdue.
2) The company tracks wages, salaries and related taxes in the Payroll section.
3) In the Expense section, employee business related expenses are recorded.

There are different categories of accounting software which are as follows:

a) Personal Accounting softwares are mainly meant for home users. They are simple and inexpensive with simple functioning such as, managing budgets. 

b) Low end accounting softwares are made for small business markets that are capable of serving a single national market. It is characterized by 'single entry' products. 
 
c) Mid market accounting softwares work well for people with large businesses. These softwares are capable of serving the needs of multiple national accountancy standards and they allow accounting in multiple currencies.

d) High end accounting softwares are complex and expensive business accounting software that are also known as Enterprise resource planning or ERP software.