computerized accounting

A computerized accounting system is a software program that can be accessed and stored on the internet, server of a network or in a company’s computer system.

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computerized accounting

COMPUTERIZED ACCOUNTING

A computerized accounting system is a software program that can be accessed and stored on the internet, server of a network or in a company’s computer system. The accounting systems help the organizations to prepare budgets, manage organizations bank account, to manage the cost of projects and also helps to set up organizations income and expenses account.

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Advantages of Computerized accounting system.

  1. Accuracy.

Computer systems produce results that are accurate since they are designed in a way that they provide no room for error.

  1. Highly reliable results.

Due to a high level of accuracy, people trust the computerized systems in delivery of results and hence implement them for use in their organizations.

  1. Speed.

Reports and statements are generated within a short time using computerized accounting system unlike manual system which takes a long period of time.

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  1. Enhanced security.

Data or Information prepared using computerized accounting systems are secure from access by unauthorized personnel since before people are granted access into a system they have to go through authentication process to verify their identity.

  1. Minimizes cost of an organization.

Since paper work is less in computerized accounting, cost of operations is minimal.

  1. Easy access of data by authorized personnel.

Data can be accessed easily by more than one individual and from a different location as long as the individual is authorized to have access.

 

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Differences between manual and computerized accounting system.

  1. Manual accounting system uses books of original entry to record data while computerized accounting uses a database that is customized.
  2. Manual accounting system performs its calculations through a manual process since it involves paper work while in computerized accounting system the computers perform the calculations and produce the output.
  3. Manual accounting system is time consuming while computerized accounting system saves on time since it is faster.
  4. Manual accounting system does not involve backup of data while transactions in computerized accounting systems can be backed up and saved.
  5. Trial balance in manual accounting system is prepared when it is required may be for reference purposes while in computerized accounting system the computer systems prepare the trail balance on daily basis.
  6. Financial statement may be required at the end of the financial year in manual system while in the computerized accounting system financial statement is produced within a short time just by clicking a button in the computer system.

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