Computerized Accounting

Computerized Accounting is something that caused a revolution in the

known world by allowing accounting to be done with an unparalleled
efficiency and accuracy. Half the human errors are removed from the
equation since the calculations are done via machines that simply can't
get anything wrong except by the user's fault.

So, what is computerized accounting you may ask. Ever since the
appearance of the computer that its prime use was to automate the
access to information and on its primordial it was made especially to
handle numbers. First it were simple maths but eventually it evolved to
something far greater than that, which allowed the computer to be a
handy tool when it came to accounting.

Some advantages of computerized accounting is that unlike the

traditional accounting, the reliance on computers to do calculations
reduce the amount of errors that can be generated in a final calculation.
For example, how common it is for a person who is adding a chain of
numbers to mistype a number because it has to keep eyes on several
things, and of course, only certain calculators display the values you
already inputted. With a computer acting as a backup, that's never the
problem because you can use spreadsheets that not only do these
additions for you but they can perform more tasks.

A computerized accounting information system is relatively inexpensive

to assemble and it can ease many accounting related functions.
Computerized accounting salary spreadsheets, computerized financial
accounting, there are many tasks that can be performed several times
more easily when you can relieve yourself of human errors to a certain
degree. You have to remember of course that someone has to input the
data and flaws can still happen in the system.

To prevent that you may resort to computerized accounting specialists

who are trained in the area under several ways and are capable of doing
most computerized accounting tasks without making a single error.
When you have a computerized system of accounting you won't want to
leave the system at the mercy of unexperienced hands that may remove
any advantage of owning it, so it's important to resort to the proper
personnel. 

In short, a computerized accounting information system can make you

save money by making sure that errors are reduced and work efficiency
 is increased. There is a reduced necessity for accounting staff and all
the work will be processed with fewer errors, so it's all advantages when
it comes to comparing these methods with the traditional ones.

Indian accounting is set to face new challenges from the developed

countries after outsourcing accounting work . To meet the challenge
accounting sector in India needs tangible improvement in terms of quality
and output. To fulfill these needs , Indian accountants must be well
formed about the latest trends in accounting industry , i.e. about new
techniques of voucher entries , new methods of accounting of branches
and departments and new system of automation of accounting work . This
should be possible only with the accountants interface millennium
technology (IT ) in bringing about which is playing an important role in
the era of globalisation

(IMP)

The Impact of Information Technology on

Accounting

Information technology (IT) has created significant benefits for accounting departments.
IT networks and computer systems have shortened the lead time needed by accountants
to prepare and present financial information to management and stakeholders. Not only
has IT shortened the lead time required to present financial information, but it also has
improved the overall efficiency and accuracy of the information.

Computerized Accounting Systems

1. The biggest impact IT has made on accounting is the ability of companies to
develop and use computerized systems to track and record financial transactions. Paper
ledgers, manual spreadsheets and hand-written financial statements have all been
translated into computer systems that can quickly present individual transactions into
financial reports.

Most of the popular accounting systems can also be tailored to specific industries or
companies. This allows companies to create individual reports quickly and easily for
 management decision making. Additionally, changes can be made relatively easy to
reflect any economic changes in business operations.
2.
Increased Functionality

 Computerized accounting systems have also improved the functionality of accounting

departments by increasing the timeliness of accounting information. By improving the
timeliness of financial information, accountants can prepare reports and operations analyses
that give management an accurate picture of current operations. The number of financial
computerized systems.reports has also been improved by computerized systems; cash flow
statements, departmental profit and loss, and market share reports are now more accessible
with

Improved Accuracy
 Most computerized accounting systems have internal check and balance measures to
ensure that all transactions and accounts are properly balanced before financial statements
are prepared. Computerized systems will also not allow journal entries to be out of balance
when posting, ensuring that individual transactions are properly recorded.

Accuracy is also improved by limiting the number of accountants that have access to
financial information. Less access by accountants ensures that financial information is
adjusted only by qualified supervisors.

Faster Processing
 Computerized accounting systems allow accountants to process large amounts of
financial information and process it quickly through the accounting system. Quicker
processing times for individual transactions has also lessened the amount of time
needed to close out each accounting period. Month- or year-end closing periods can
be especially taxing on accounting departments, resulting in longer hours and higher
labor expense. Shortening this time period aids companies in cost control, which
increases overall company efficiency.

Better External Reporting

 Reports issued to outside investors and stakeholders have been improved by

computerized accounting systems. Improved reporting allows investors to determine if a
company is a good investment for growth opportunities and has the potential to be a high-
value company. Companies can utilize these investors for equity financing, which they use
for expanding business operations.

Disadvantages
  Power failure, computer viruses and hackers are the inherent problems

of using computerized systems;

 Once data been input into the system, automatically the output are

obtained hence the data being input needs to be validated for accuracy

and completeness, we should not forget concept of GIGO (Garbage

In(Input) Garbage out ( Output) and

 Accounting system not properly set up to meet the requirement of

the business due to badly programmed or inappropriate software

orhardware or personnel problems can caused more havoc and

 Danger of computer fraud if proper level of control and security

whether internal and external are not properly been instituted

Accounting Software
Accounting softwares were one of the first applications to come up in offices along
with the advent of Software and Hardware. The reason being moneys are the first of
our concerns when we think of control. The leaders of accounting software like
Quickbooks, Peachtree, MYOB are still around and doing well with varying degrees of
success.
Typically, an Accounting Software is developed using a Database, a Front End RAD
tool visual basic and a Report Writer such as crystal reports. For how to develop
your own accounting software click here. Accounting softwares can be for the
desktop, network (client server) and web. For developing a web accounting
application or software you will need a web development tool like ASP.Net. Many
Accounting softwares have been developed using C and C++. Accounting softwares
developed using these tools provide great speed and usability, but, to upgrade them
to multi user large database environments is mostly unsuccessful as the overhead
begins to climb nullifying the benefit of lean code which the C++ tools provide.

A well designed Accounting Software caters to multiple domains. So, a well designed
accounting software can, in theory, meet the needs of multiple types of firms.
However, in practice a certain amount back bending is required to use a Generic
Accounting Software in a construction or church or call center or fund management
environment. 

Here the versatility of the software boils down to the design of the Chart of Accounts
which can accommodate a wide range of accounting requirements. 

For most small businesses, a generic accounting software will be sufficient unless
their needs are very specific. However, with the cost of software and hardware on a
downward spiral combined with the high speed and processing power, the small
business too can think of highly customized software incorporating their own design
and commercial requirements. 

Payroll accounting software

A payroll accounting software records the salaries of employees working in an

organization and enables prompt payment ensuring a certain fairness as all are paid
in a particular time frame. 

A payroll accounting software starts with generating the pay slips. To generate a pay
slip the software should be able to record attendance, record employee details, pay
details, leave details, grading, and incentive details if any. Based on this, the
software should be able to generate monthly and yearly provident fund, month and
yearly professional tax, ESI etc, tax returns, salary certificate, gratuity valuation,
bank statement, leave encashment valuation, MIS reports, increment details and
deductions.

Payroll forms a part of HR. If an HR feature is provided, it should ideally be able to

monitor the employees work performance, help the management in identifying the
areas where each employee can improve and thus assist in organizing training
programs, selecting the areas of training, durations, results of the training and on
the whole help in improving the organizations functioning.

Quickbooks 

QuickBooks is one of the earliest accounting software to appear in the market. It has
managed to hold on to its position, since then. It is ideally suited for managing small
business accounting and finances. With the advent of Internet, makers of
Quickbooks have been quick to enable on-line features like accessing all business
accounting information. It also claims to work on any operating system you prefer.
Standard features like Print checks, pay bills & track sales & expenses, create
estimates & invoices, Tools for payroll & tracking employee time, Track inventory
and set reorder points, Manage customers, vendors & suppliers Track Income &
Expenses are included. Credit card acceptance is also included. 
Cash Flow management is one of the strong points of Quickbooks. Cash flow
management is the also the key to ensuring smooth functioning of an organization.
Quickbooks lets you create a forecast based on past performance and future
variables. This can be used to manage the company better. Quickbooks also lets you
track inventory for hundreds of products thereby serving serving as a top class small
business accounting and inventory software. 

SAP Business One 

SAP has 18000 + installations around the world. SAP Business One 2005, is
supposed to be easier, of better quality and supportability. Delivered through SAP
global network of authorized channel partners, SAP Business One is targeted at the
small and midsize companies. An affordable business management solution (really)
designed for SMEs typically with 10 to 100 employees, SAP Business One is available
in more than 40 country versions, used by more than 10,000 customers and
delivered by a network of 1,200 partners who specialize in selling, implementing and
maintaining the solution. 

Oracle Financials 

The Oracle E-Business Suite, Financials, family of applications automates and

streamlines all your financial business processes, for enterprise-wide daily business
intelligence that lets you make more informed decisions, improve operations, and
reduce costs. An highlight of this package is the unified data model which provides a
single accurate view of all your financial information, including a 360-degree view of
your customers. And Oracle Financials, running on Oracle technology, gives you
industry-leading performance and scalability. 

Oracle Financials is part of the Oracle E-Business Suite, integrating with other E-
Business Suite applications including Oracle Marketing and Oracle Supply Chain
Management. Implement one or several application families or implement the
complete Oracle E-Business Suite for the fastest way to high-quality enterprise
information.

Activity Based Management Advanced Collections Assets Balanced Scorecard Bill

Presentment Architecture Cash Management Daily Business Intelligence for
Financials Enterprise Planning and Budgeting Financial Analyzer Financial
Consolidation Hub General Ledger iAssets 

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