Computerised accounting system is a software that helps businesses to manage the big financial transactions, data, reports, and statements with high efficiency, speed, and better accuracy. Better quality work, lower operating costs, better efficiency, greater accuracy, minimum errors are some of the advantages of Computerized Accounting. Let us learn more about Computerized accounting environment.
Need for Computerised Accounting
Its need arises from the benefits of speed, accuracy and lower cost of handling the business transactions. Also, it has the capability to record a large number of transactions with speed and accuracy. It allows quick and quality reporting because of its speed and accuracy.
Manual accounting system requires large storage to keep accounting records, and vouchers. The requirement of books and stationery and books of accounts along with vouchers and documents is dependent on the volume of transactions.
There is a need to reduce the paperwork and dispense with a large volume of books of account. This can be achieved working with the help of computerized accounting system.
Features of Computerised Accounting Environment
This Accounting System and its awareness among entities have become a necessity in the present environment. Businesses of whatever field and size are shifting from the practice of maintaining accounts manually. The manual process is more time-consuming and exposed to human error.
Storage and retrieval of data and generation of a report cannot be ensured in real time in the traditional system. There is a need to shift to computerized accounting systems. They have empowered business to project accurate information of financial performance.
- Simple and Integrated: It helps all businesses by automating and integrating all the business activities. Such activities may be sales, finance, purchase, inventory, and manufacturing etc. It also facilitates the arrangement of accurate and up-to-date business information in a readily usable form.
- Accuracy & Speed: Computerised accounting has customized templates for users which allows fast and accurate data entry. Thus, after recording the transactions it generates the information and reports automatically.
- Scalability: It has the flexibility to record the transactions with the changing volume of business.
- Instant Reporting: It can generate a quality report in real time because of high speed and accuracy.
- Security: Secured data and information can be kept confidential as compared to the traditional accounting system.
- Quick Decision Making: This system Generates real-time, comprehensive MIS reports and ensures access to complete and critical information, instantly.
- Reliability: It generates the report with consistency and accuracy. Minimization of errors makes the system more reliable.
Advantages of Computerised Accounting
1. Better Quality Work: The accounts prepared with the use of computerized accounting system are usually uniform, neat, accurate, and more legible than a manual job.
- Lower Operating Costs: Computer is a reliable and time-saving device. The volume of job handled with the help of computerized system results in economy and lower operating costs. The overall operating cost of this system is low in comparison to the traditional system.
- Improves Efficiency: This system is more efficient in comparison to the traditional system. The computer makes sure speed and accuracy in preparing the records and accounts and thus, increases the efficiency of employees.
- Facilitates Better Control: From the management point of view, there is greater control possible and more information may be available with the use of the computer in accounting. It ensures efficient performance in accounting records.
- Greater Accuracy: Computerized accounting make sure accuracy in accounting records and statements. It prevents clerical errors and omissions in records.
- Relieve Monotony: Computerized accounting reduces the monotony of doing repetitive accounting jobs. Which are tiresome and time-consuming.
- Facilitates Standardization: Computerised accounting provides standardization of accounting routines and procedures. Therefore, it ensures standardization in the accounting records.
- Minimizes Mathematical Errors: While doing mathematical work with computers, errors are virtually eliminated unless the data is entered improperly in the system.
Solved example for you
Question: What are important features of computerized accounting?
Ans. Some important features of computerized accounting are:
- Simple & integrated
- Accuracy & Speed