computerized accounting essay

computerized accounting essay

The Benefits of Computerized Accounting Systems

1. Introduction

In the business environment, the computerized accounting systems or software are so easy to use. This is because once they are set up with the relevant modules, they need minimal training for the users. They are menu-driven with soft help facilities that enable the users to understand nominally the systems’ features. For instance, if one does not understand the accounting concept of ‘credit’ and ‘debit’ in the accounting transactions, the software helps him or her to understand it logically by allowing the user to do a transaction while showing the debiting and crediting financial accounts.

The trend of using computerized accounting systems in business continues to rise. In fact, computerized accounting software is often a must-have when starting a business. While many business owners are experts on their products and services, not many are experts on their company’s financial systems. Hiring an accountant is the most common solution for the business owners. However, if you are at the early stages of your business and cannot afford the service of an accountant, you can subscribe to the computerized accounting system. The objective of this paper is to discuss the benefits of using good computerized accounting systems in the business environment.

2. Efficiency and Accuracy of Computerized Accounting Systems

When data is input, the processing machine will take care of the computing. The information will then be processed automatically and the financial report will be generated without delay. An accounting system on a computer eliminates the potential for errors associated with double-bookkeeping between accounting books, providing a faster and more accurate solution for your accounting department. It allows employees to make multiple bookings of multiple journals. The sound cost-plus accounting in a computer then automatically allows the system to post them in the general ledger, the various subsidiaries as well as the other proposed resale and administrative modules. It also allows the use of default settings for presumption accounts, depending on the type of entry to be made. In addition, all relevant entities must be taken mutatis-mutandis and the GL accounts connected to the different company transactions.

The automation enables you to ensure the accuracy of your books. An accounting system on a computer eliminates many of the mechanical and mathematical errors. The complete entries are checked. Therefore, the computerized accounting system is always kept in balance. Even if an incorrect entry is made, the system will not post it without proper accounting. This is unlike the manual system where you have to check the entries manually. Moreover, an accounting system on a computer allows more efficient processing of data. When a calculator operator enters data into the system, the computer will alert when an error occurs and the calculations will not be completed properly. Therefore, an accounting system on the computer may provide an increased level of internal control. Once installed, the computerized accounting system offers companies the ability to speed up their accounting functions.

3. Cost Savings and Time Efficiency

Computers are great for understanding business accounting as a renewed discipline, designed to teach students how to deal with accounting problems in a computerized business environment, with programs that enable students to process an inventory of products, invoices, and general entries. Computerized devotion to accounting in business can help businesses assess commodity costs and revenues accurately. These are the most important elements to consider when purchasing a product in the long term: the cost of acquisition of the product, the cost of holding the product, the direct material, and direct labor costs and variable expenses. Use the right quantification procedures, even under the entities to which he had been applied in 1418. Perceptions evade the account, compared with intensively those who are constantly trained in computerized accounting. Other benefits include creating needful business plans with tools for piloting arrow actions and telling solid hire studies of the product-related costs of a stabilized business. Furthermore, training intensively those who were constantly trained in computerized bookkeeping. Carefully revise the advantages of using quantitative forms, as opposed to non-quantitative.

When most businesses consider the decision to buy or build a computerized accounting system, they typically weigh potential costs against perceived benefits. The benefits inherent to a computerized accounting system suggest that a healthy return on investment is likely. These benefits include decreased costs, increased data entry accuracy, immediate access to financial data, better internal controls, and increased efficiency. Furthermore, the US Small Business Administration estimates that businesses save 17 days over manual accounting methods by adopting a computerized accounting package. Double entry accounting makes it easy to keep financial data in precise business control. Deadlines can be met, credit terms can be negotiated, and when it comes to business around times like Christmas, there might be a need to handle cash flow financing through methods such as factoring, releasing working capital so that a business goes forward. It is a critical component of the whole economy. Their progress naturally stimulates investment.

4. Enhanced Data Security and Backup

One of the most important advantages of computerized accounting is enhanced data security. Small business owners are especially reliant on computerized accounting solutions because these systems are built with small-business owners in mind—the last thing a small business owner wants is to pay for something complicated and confusing. These easy accounting systems can protect your information from unauthorized access and can go a long way to ensuring the safety and security of your financial records, no matter what the future brings. Computerized accounting systems also allow business owners to manage their own backups more easily. Business owners who are busy running their business can feel confident that they won’t lose their records in the event of a natural or man-made disaster. When your business depends on rock-solid bookkeeping, the answer is the cloud. The cloud is where computerized accounting solutions shine, outshining hard-copy systems in every dimension.

The use of computerized accounting systems is an important subject that has been revisited in the Nigerian business, political, technological, and economic discussions in the past three decades. The direct consequence of this development is the enormous benefits of using computerized accounting systems. Computerized accounting systems have also exposed accountants to the many things that software and hardware technologies can do. The findings of this paper are that corporate organizations are forced to accept the use of computer technology due to the transformation of the commercial environment of the 21st century, having revealed how they compete in a granted business environment that disseminates a chunk of knowledge, where the collective intelligence and large-scale personalization are the results of the commercial success or disappointments.

5. Integration and Streamlining of Accounting Processes

The integration and streamlining of accounting processes is a third major advantage of computerized accounting information systems. The term “integration” is used by many authors to refer to the elimination of redundant data processing efforts between various modules of accounting-specific applications. “Streamlining” refers to the elimination of redundancy in the business processes themselves based on the availability of newly designed or newly integrated applications. It should be noted at the outset that there are opposing views with respect to the desire to integrate accounting applications. A number of authors express the need for integrated accounting or enterprise solutions. The opposite case is advanced by some authors who do not believe that integrated systems are advantageous and who consider system interfaces to be entirely adequate to satisfy the communication needs of performance management systems.

E. User Satisfaction: In general, users of accounting systems that fail to meet their information needs are quite vocal in their expression of dissatisfaction. One can imagine the collective joy among the users of accounting systems that are designed to produce only the information that the users specified in the system requirements specification. The only reason for any dissatisfaction is the user’s failure to properly specify his or her needs.