The initial form of accounting software was designed specifically, for mainframe applications. Later, host based accounting software and accounting for mini computers was launched. In 80's, the first set of PC based accounting software evolved and later, it was connected through LAN to the network based system. Accounting was designed for the client - server systems, in the 90's decade and after the development of client server based system, the three tiers and n-tier architecture evolved. With the changes in technology and changed in demands of the market, a latest form of software solution called Software as a solution is gaining market.
Mainframe Accounting System: The first form of accounting software was designed on mainframe computers. The initial system had punch card based processing and only a limited number of accounts could be updated in one time. Sperry Rand Corporation, Burroughs and IBM were main hardware vendors and applications used to run on time sharing environment.
In 60's decade, the initial form of software was inventory management and it mainly included maintaining balances and reporting inventory records. Only general accounting procedure was included in this software. In 70's, the software called MRP was designed, which was basically the manufacturing requirement planning, which included the raw material purchase and inventories.
Later in 80's, the computer systems were designed in a better way and cost of hardware also reduced. It started the trend of using minicomputers for small and big organizations. IBM tried to retain its business in this decade and Sperry Rand was unsuccessful in developing a mini -computer. Oracle introduced its relational database system in 70s and in 80s, the many companies launched database management systems based on relational database system.
Accounting Moved from Mainframe to PC Based System: The initial PC based accounting software were mainly, single user based systems. Later, with the introduction of multiuser environment and networking, the other form of software was introduced. Oracle introduced its client server version of database and Microsoft launched the SQL Server database.
In the client server version, the server maintained the transactions at the database and user interface was designed to get commands from the client. After the client server version the multi-user version came. The database came up with multi-user features and accounting software could update transactions from many user terminals. The technologies introduced by Microsoft and Oracle enabled low cost database management as compared to Mainframe.
Software as a Solution: The latest version of software in market is software as a solution. Many companies are venturing into this line of software, where the solution will be provided by the company at a low cost.
Demand for low cost software and increasing competition in market has led businesses to search for options, which are error free and fast. Businesses are seeking more functions in software at a low cost and this trend supports the concept of accounting software as a solution. The new software is also tailored to have easy customization features and integration to software designed on different platforms.