Accounting Software
Financial record-keeping, compliance, and reporting.
Key Functions
| Function | Description | AI Opportunity |
|---|---|---|
| General Ledger | Chart of accounts, journal entries, trial balance | Auto-categorization |
| Accounts Payable | Bills, vendor management, payment scheduling | Invoice extraction |
| Accounts Receivable | Invoicing, customer billing, collections | Payment prediction |
| Bank Reconciliation | Match transactions, identify discrepancies | Auto-matching |
| Expense Tracking | Receipt capture, categorization, approval workflows | Receipt OCR |
| Payroll | Salary calculation, tax withholding, pay runs | Anomaly detection |
| Tax Compliance | GST/VAT calculation, filing, tax reporting | Rule updates |
| Financial Reporting | P&L, Balance Sheet, Cash Flow statements | Natural language queries |
| Multi-currency | Exchange rates, conversion, foreign transactions | Rate optimization |
| Budgeting | Budget creation, variance analysis, forecasting | Trend prediction |
Data Footprint
Core Entities
| Entity | Fields | Volume | Sensitivity |
|---|---|---|---|
| Transactions | date, amount, account, description, reference | High | Medium |
| Accounts | code, name, type, parent, status | Low | Low |
| Contacts | name, address, tax ID, payment terms, bank details | Medium | High |
| Invoices | number, date, line items, taxes, status, payments | High | Medium |
| Bills | vendor, date, due date, items, approval status | High | Medium |
| Bank Feeds | institution, account, transactions, balance | High | High |
| Receipts | image, extracted data, categorization | Medium | Low |
| Tax Periods | dates, obligations, filings, payments | Low | High |
| Employees | personal details, salary, tax codes, leave | Medium | High |
| Fixed Assets | description, cost, depreciation schedule | Low | Medium |
Integration Points
| System | Data Flow | Direction |
|---|---|---|
| Banking | Transactions, balances | Inbound |
| Payroll | Employee costs, tax obligations | Bi-directional |
| CRM | Customer details, invoices | Bi-directional |
| Ecommerce | Orders, payments, refunds | Inbound |
| Inventory | COGS, stock valuation | Bi-directional |
| Expense Apps | Receipts, reimbursements | Inbound |
| Tax Authority | Filings, payments | Outbound |
| BI Tools | Financial data export | Outbound |
Data Retention
| Data Type | Typical Retention | Compliance Driver |
|---|---|---|
| Transaction records | 7+ years | Tax law |
| Tax filings | 7+ years | Tax law |
| Payroll records | 7+ years | Employment law |
| Bank statements | 7+ years | Audit requirements |
| Receipts/invoices | 7+ years | Tax law |
Evaluation Criteria
| Criteria | Weight | Notes |
|---|---|---|
| Bank feed coverage | High | Local bank integrations matter |
| Tax compliance (local) | High | GST/VAT automation |
| Multi-entity support | Medium | For growing businesses |
| API access | High | Integration capability |
| Data export | High | Portability |
| Reporting flexibility | Medium | Custom reports |
| Mobile experience | Low | Approve on the go |
Market Leaders
| Product | Strength | Best For |
|---|---|---|
| Xero | Bank feeds, ecosystem | SMB, NZ/AU/UK |
| QuickBooks Online | Payroll, US tax | SMB, US market |
| Zoho Books | Price, suite integration | Cost-conscious |
| FreshBooks | Invoicing UX | Freelancers, services |
| Sage | Enterprise features | Mid-market |
| NetSuite | ERP integration | Enterprise |
AI Disruption Potential
| Function | Current State | 2027 Projection |
|---|---|---|
| Transaction categorization | Semi-automated | Fully automated |
| Invoice data extraction | Good (OCR) | Perfect (multimodal) |
| Anomaly detection | Basic rules | Predictive |
| Tax compliance | Manual triggers | Continuous monitoring |
| Financial forecasting | Spreadsheet models | Real-time AI |
| Audit preparation | Manual | Auto-generated |
Build vs Buy: For most businesses, buy. The compliance burden alone justifies using established software with maintained tax rules. Build only if you need deep vertical integration or have unusual requirements.