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What are the Different Types of Business Software?

By Daphne Mallory
Updated May 16, 2024
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One of the best investments any small business owner can make is to purchase appropriate business software. The type of business software package that a business owner needs often depends on the size of the company and the tasks that need to be automated. The common choices for business software are business invoicing software, billing software, payroll software, database software, and asset management software.

Business invoicing software and billing software eliminate the need to create every invoice from scratch. This type of software often includes ready to use templates that can be customized to match the business. The user simply enters the customer or client information in the database, and selects who to send the invoice to. There is often an option to select the type of invoice to be sent as well. The software prompts the business owner to enter data in the applicable fields, and generates an invoice to be sent out when all necessary fields are entered.

Payroll software can make managing payroll taxes and payments to employees and independent contractors easier and faster. Many programs allow users to print paychecks and other forms required for tax purposes, such as W-2s and W-3s. Whether a business has one employee or several thousand, there is likely a payroll software solution to meet the needs of the business.

Database software helps small businesses store and share key information needed to operate the business, such as names and addresses of contacts, to-do lists and documents. Businesses often use one of three ways to install and access the database: web-based, desktop, or server database. A larger company usually needs a server database, because of the size of the files that need to be stored. Small- and medium-sized businesses often choose web-based or desktop databases.

Asset management software is often used by all types of businesses involved with physical sales, distribution, or manufacturing. Any business owner that wants to automate the task of managing physical and intangible assets can usually benefit from using it. For example, the business owner can enter information about the results of service maintenance, and the asset management software in turn can generate information, such as depreciation value and dates for replacement. Intangible assets, such as software and patents, can be managed as well.

The decision to buy business software often depends on other start up costs or the amount of profit the business is generating. The benefits of automating routine business tasks usually make a business more effective. Often, the price of purchasing business software is offset by the savings it generates.

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Discussion Comments
By anon278709 — On Jul 09, 2012

I think that a small business needs one more software which will allow a chief to monitor all the processes that happen in the company. This is a tracking software. I work for a small firm as well. And we are using the Comindware issue tracker to have a full picture of everything that happens in the company.

By starrynight — On Jun 04, 2012

The last office I worked at was a small business, but I'm pretty sure the guy who owned the business didn't invest in service business software that took care of payroll. From what I remember, an outside company actually handled the payroll for him!

I'm not sure what the cost of that was versus the cost of payroll software, but it might be a good alternative for a very small business.

By JessicaLynn — On Jun 04, 2012

@indemnifyme - That makes sense, but if each agency used an individual software package, they would still have to access a database with customer information somehow. So you would still run into the same problem if the database went down. Good point though.

I personally think that small business software is a smart thing to invest in. I have a few friends who run various small businesses, and they both resisted spending money on invoicing software. However, when they did they noticed that they could actually get more work done because they could invoice quicker! So it was a good investment.

By indemnifyme — On Jun 03, 2012

I've noticed that online business software (or "cloud-based" software) has become much more popular in the last few years. Most of my friends who have office jobs utilize some kind of cloud-based software to do their jobs.

At the last insurance company I worked for, we used online business software to service insurance policies as well as generate quotes for potential customers. It worked well, but with one major drawback: since the whole insurance company was using the same web-based application, if the app went down, no one could do any business!

A customer couldn't do business at an agency or by calling the 1-800 number, because everyone used the same software. If each agency used an individual software package, this wouldn't be a problem.

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