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General Accounting Discussions: Which Account to use for Business Software purchases?

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    • CommentAuthorchuckp
    • CommentTimeMay 25th 2007
     
    I run a service business and use Microsoft Accounting software to do the accounting. One outstanding question I have is how to I classify a software purchase for the business? I just bought ACT! software for example and I don't know what expense account to use. I don't see one for software. There's supplies, computer supplies, etc. But I would think that software might be it's own category or go somewhere special? Please advise. If I need to create a new category, what tax item is it associated with?? Thanks !!
    Thankful People: Pierre
    • CommentAuthorstumpo77
    • CommentTimeJun 9th 2007
     
    You can use two approaches at your own discretion. If the software is a significant purhcase you can charge it to a fixed asset account and depreciate it over a specific period of time. Othewise you can just charge it to computer supplies expense or create another expense account.

    The first approach is the right way to do it though.
    Thankful People: narayanswamy
    • CommentAuthorjamesparker
    • CommentTimeDec 16th 2009 edited
     
    I would recommend you to use the most authenticated and significant software is the peachtree and the quickbook.
    Microsoft is OK but the mentioned software are specially developed for the accounting purpose for any kind of business!

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