COMPUTERIZED ACCOUNTING

COMPUTERIZED ACCOUNTING

 Introduction           

            A computerized accounting system saves a great deal of time and effort, considerably reduces (if not eliminates) mathematical errors, and allows for much more timely information than does a manual system. In a real-time environment, accounts are accessed and updated immediately to reflect activity, thus combining steps 2 and 3 as discussed in the preceding section. The need to test for equality of debits and credits through trial balances is usually not required in a computerized system accounting since most systems test for equality of debit and credit amounts as they are entered. If someone were to attempt to input data containing an inequality, the system would not accept the input. Since the computer is programmed to post amounts to the various accounts and calculate the new balances as new entries are made, the possibility of mathematical error is markedly reduced.

             Computers may also be programmed to record some adjustments automatically at the end of the period. Most software programs are also able to prepare the financial statement once it has been determined the account balances are correct. The closing process at the end of the period can also be done automatically by the computer. Human judgment is still required to analyze the data for entry into the computer system correctly. Additionally, the accountant’s knowledge and judgment are frequently required to determine the adjustments that are needed at the end of the reporting period. The mechanics of the system, however, can easily be handled by the computer.
Legal disclaimer

         Computerized accounting is a highly integrated application that transforms the business processes with its performance enhancing features which encompass accounting, inventory, reporting and statutory processes. This helps the company access information faster, and takes quicker decisions. Computerized accounting also guarantees real-time optimization of operations and enhanced communication.

Advantages:

            High speed and mobility of reporting, reliability, no routine work, increased accuracy, internal control system of increased productivity, easy back up and restoration of records; the disadvantages include: extremely high costs on developing, introducing and using the system, special trainings for personnel, increased personnel costs, dependence on machines etc.

            Obviously both computerized and manual accounting has advantages and disadvantages but they perform the same task, and the final result is the same. The main differences between them are the costs Health Fitness Articles, speed and mobility.

            Thus small and medium businesses usually prefer manual accounting without detriment to quality while large corporations apply complex accounting systems which cost millions dollars but the effect from their application exceeds all the expectations.

Features:

    1. No Codes: working with Computerized Accounting is very easy as it has no codes.

  2. Accounting Books: Computerized Accounting itself automatically prepares principal accounting books like cash book, bank book, Journal ledger, sales and purchase books along with debit notes and credit note registers from the basic data. It also prepares statutory reports like P&L A/c, Balance Sheet and Management accounts reports like Cash flow statement, Funds flow statements Ratio analysis etc.,

3. Ledgers & Groups: Computerized Accounting creates ledgers & groups under default groups which were created and provided by the Computerized Accounting for the user convenience. Those ledgers and groups can also be altered to necessary ledgers and groups.

4. Tree Structure: Computerized Accounting displays all the default and user created ledgers and groups in a tree structured which also calls as Hierarchy structure. The ledgers and groups can add or remove to the structure.

5. Export/Import: Computerized Accounting allows the user to export or import the data from one system to another system.

6. Multi currency accounting: Computerized Accounting shows multi currency symbol for every transaction. It also provides reports with multi currency symbols.

7. Interest Calculation: Computerized Accounting allows the user to solve problems on interest calculation by using advanced parameters.

8. Budgets: Computerized Accounting prepares financial and costing budgets. They can be set and get reports for annual, half-yearly, quarterly, monthly etc.,

    9. Final accounts: Computerized Accounting follows no special system in preparing final accounts. Trading A/C, Profit & Loss A/C, and Balance Sheet will be prepared automatically by the software.

10. Tax Calculation: Computerized Accounting calculates the taxes using almost all the taxing methods following by State and Central Governments such as ST, CST, VAT, TDS, FBT, PT, etc.,

11. Payroll: Computerized Accounting prepares payroll statements and pay slips for the employees.

12. Pay limit: Computerized Accounting sets pay limits for every transaction that entered into voucher.

13. Voucher Number: Computerized Accounting allows the user to give numbers to the voucher. It also allows the user to give suffix and prefix to the voucher numbers.

14. Unlimited Companies: user can create or open number of companies as there is no limit to open or create companies Computerized Accounting.

    15. Backup and Restore: In Computerized Accounting data can be taken back up and it can also be restored as and when it requires to the user.