Accounting Software Development: Benefits, Types, Features, Cost

For many business owners, the meaning of custom accounting software development is as clear as mud.

If you’re one of them, you might have heard that custom accounting apps are better compared to off-the-shelf ones. That sounds good but… 

Does your business need custom software for accounting? How does one go about developing it? How long does the accounting software development process take?

Let’s clear everything once and for all.

In this post:

• Custom accounting software explanation
• Who needs custom accounting software
• Types of custom accounting apps
• Benefits of custom software for accounting
• Accounting software development process
• Cost to build custom accounting app

Not here to read about accounting software? Check these instead:

• What is Offshore Software Development?
• 10 Types of Websites: Which One Do You Need?
• How Much Does It Cost to Develop a Custom Application?

What is Custom Accounting Software?

Custom accounting software is software designed to meet the needs of a specific business. This software is made based on the requirements set forth by that business, so it has features designed to automate tasks performed by internal accountants.

High levels of customization and security contribute to the accelerated adoption of custom accounting software among businesses. Market research suggests that the demand is also increasing because the conventional accounting apps lack technological competitiveness.

Who Needs Custom Accounting Software?

Any business can benefit from custom accounting software development. Yet, we can list several examples where custom solutions should be especially useful.

Such examples of businesses include:

• Startups trying to develop into mid-range businesses
• Nonprofits looking to improve the management of donations and finances
• Large companies in need to manage budgets of many separate projects
• Businesses that require accounting solutions that fully conform to their unique needs
• Companies looking to automate more financial processes than provided by off-the-shelf software

Types of Custom Accounting Software

A reliable software development company can build accounting apps for any business need. The most common type of custom accounting software, though, include these:

• Fund accounting software. Contains features for effective donation management, fundraiser planning, donor relationship management, and other tasks. Developed with all the legal requirements to donations and nonprofit activities.
• Commercial accounting software. Designed to help mid-sized businesses with most accounting tasks. Includes a range of features agreed upon with the client (payroll accounting, sales management, taxes, invoice management, and others).
• Enterprise resource planning (ERP) software. Used by large businesses to cover both core and complex accounting operations. Besides accounting, ERP often supports other business requirements like inventory management, project planning, customer relationship management (CRM), and workflow management.

Another major advantage of custom accounting software is integration with the user’s existing applications. This means that the software can exchange info with other programs your HR, sales, or any other departments are using.

Benefits of Using Custom Accounting Software

Off-the-shelf accounting software is cheaper, but it’s sold to the mass market. So, it’s designed to meet broad business requirements, which means you might be paying for unnecessary functionality. And there’s no way to customize it.

Compared to off-the-shelf options, custom accounting software offers these benefits:

• Higher security. Custom software can be tailored to offer the highest grade of security and confidentiality.
• Easier staff training. Since custom software is designed to fit your existing processes, training staff is much easier.
• Competitive advantage. Custom accounting software might offer features and automations your competitors don’t have.
• More effective automation. You can decide which processes and procedures to automate to improve the efficiency of accounting.
• Quick modifications and changes. You own the software code, so you can ask developers to make any improvements or add features at any time.
• Functionality tailored to a specific business. The range of functions in custom software is designed to conform to the unique needs of your company.

How to Build a Custom Accounting Software for Your Business

The first step is to find an accounting software development company. Get in touch with them, explain what you need, and they will build the software. Technically speaking, this process consists of several phases.

Phase I: Agreeing on the requirements (2 to 4 weeks)

Any development process is preceded by a thorough discussion of business requirements for the software. Besides the essential accounting tasks, the parties also discuss the prospects for scaling to account for business growth.

Phase II: Developing the template (2 weeks)

A template is an interface of the future app that accounting software developers and designers create to get feedback from the client. The template serves as a blueprint, so the client can decide what might be improved or agreed upon.

Phase III: Building the functionality (3 to 8 months)

Developers move on to creating a working accounting software product. This can be either a version with minimum acceptable features (also called MVP) or a version with a full range of functions agreed in phase I. The versions depend on the budget and project complexity.

Phase IV: Support and maintenance

Clients can now use the custom accounting software, which now requires only maintenance. Also, the software might need some new features in the future as companies grow, so clients can ask developers to add them.

How Much Does it Cost to Build an Accounting Software?

The cost of a custom accounting app depends on its features. 

Typical solutions for small businesses and startups cost around $20,000 while the cost for mid-range businesses can reach $40,000. Custom enterprise accounting software for large operations and complex needs might cost around $100,000.

Once again, the ultimate cost is defined after analyzing app requirements. This means the price is known at the very beginning of the software development project.