Computerized accounting system
I`m writing this letter to analyses the circumstances under which a business would adopt a computerized accounting system instead of a manual one.
Computerized accounting systems are software programs that are stored on a company’s computer, network server, or remotely accessed via the Internet. Computerized accounting systems allow you to set up income and expense accounts, such as rental or sales income, salaries, advertising expenses, and material costs.
The outputs of a computerized accounting information system are called software
A business would adopt computerize accounting system instead of manual one because the accounting programs carry out functions such as invoicing, dealing with payments, paying wages and providing regular accounting reports such as trading, profit, loss accounts and balance sheets.
A business may adopt computerize accounting system as the cost of using a manual one is high and less efficient. The business can easily set up the computerized system at a lower cost and this will cut the costs of the business. Computerized accounting offers several more benefits than manual accounting process more information faster, formulas verify calculated totals and errors are less common. Accounting systems also are customizable by industry, allowing accountants the opportunity to use preset templates for their general ledger.
Accountants also can store several years of financial information with relative ease, giving them the opportunity to review previous year’s information without sorting through stacks of paper ledgers. Most companies
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This system allows companies to record business transactions accurately and generate financial reports quickly for management review. While the functions of manual accounting have changed, it will never go away completely. Accountants must review the information presented on financial reports from the accounting system and ensure that it is accurate and valid. Accountants must also ensure that all financial information follows the Generally Accepted Accounting Principles and any other guidelines from regulatory agencies.
Most companies will use a computerized accounting system for recording and presenting their financial information. This system allows companies to record business transactions accurately and generate financial reports quickly for management review
Manual accounting requires a qualified accountant to keep a record of business transactions, computerized requires accountants which can use specific software and they cost more. Computer software calculates faster and calculates efficiently and accurately. In addition, good computerized accounting system can cost quite a bit of money for large companies, smaller businesses tend to use spreadsheets instead.
In 2012 businesses have been required by HMRC to submit their VAT return online. Computerize accounting system offer the business is that it can submit their VAT return faster and it is more convenient at it will save time
Another reason why businesses will adopt an accounting system is that the business can keep a much better record of the accounts such s they can view their stock evaluation and their customers account faster than they will have to if they had a manual accounting system.
Manual is useful, but for more efficient and more accurate bookkeeping, a computerized accounting system is more efficient. Thank you very much and I hope this letter has given you an idea why businesses may adopt a computerized account system than a manual one.