Accounting has been done manually till the 1980s, when the advent of fast computers and easy-to-use, accurate and reliable software started.
An accounting system is a collection of processes, procedures and controls designed to collect, record, classify and summarize financial data for interpretation and management decision-making.
Computerized Accounting involves making use of computers and accounting software to record, store and analyze financial data. A computerized accounting system brings with it many advantages that are unavailable to analog accounting systems.
This article does not tackle the use of spreadsheets that are often used instead of proper accounting software to process financial data. It is common knowledge that spreadsheets do not provide a scalable solution for accounting purposes and therefore are a dangerous solution to invest in.
Here are the advantages of using computerized accounting software
· Automation: Since all the calculations are handled by the software, computerized accounting eliminates many of the mundane and time-consuming processes associated with manual accounting. For example, once issued, invoices are processed automatically making accounting less time-consuming.
· Accuracy: This accounting system is designed to be accurate to the minutest detail. Once the data is entered into the system, all the calculations, including additions and subtractions, are done automatically by software.
· Data Access: Using accounting software it becomes much easier for different individuals to access accounting data outside of the office, securely. This is particularly true if an online accounting solution is being used.
· Reliability: Because the calculations are so accurate, the financial statements prepared by computers are highly reliable.
· Scalable: When your company grows, the amount of accounting necessary not only increases but becomes more complex. With computerized accounting, everything is kept straightforward because sifting through data using software is easier than sifting through a bunch of papers.
· Speed: Using accounting software, the entire process of preparing accounts becomes faster. Furthermore, statements and reports can be generated instantly at the click of a button. Managers do not have to wait for hours, even days, to lay their hands on an important report.
· Security: The latest data can be saved and stored in offsite locations so it is safe from natural and man-made disasters like earthquakes, fires, floods, arson and terrorist attacks. In case of a disasters, the system can be quickly restored on other computers. This level of precaution is taken by Clever Accounting.
· Cost-effective: Since using computerized accounting is more efficient than paper-based accounting, than naturally, work will be done faster and time will be saved. When one considers that Clever Accounting, one of the latest online accounting solutions, starts at a low monthly subscription (check out pricing here), then computerized accounting really becomes a no-brainer.
· Visuals: Viewing your accounts using a computer allows you to take advantage of the option to view your data in different formats. You can view data in tables and using different types of charts.
Computerized Accounting represents a technological advancement in the field of business accounting. Do you use computerized accounting in your business? If yes, how important are the above advantages for the continued survival of your business?