Sunday, October 10, 2010
The Advantages of Computerized Accounting
Here are some of the advantages of using a computerized accounting system:
• The arithmetic of adding up debits and credits columns is done automatically and with total accuracy by the computer.
• Audit trails or details are automatically maintained for you.
• Produce financial statements simply by selecting the appropriate menu item.
• A computerized system lets you retrieve the latest accounting data quickly, such as today’s inventory, the status of a client’s payment, or sales figures to date.
• Data can be kept confidential by taking advantage of the security password systems that most accounting programs provide.
Computerized accounting programs usually consist of several modules.
The principal modules commonly used are:
• General Ledger
• Order Entry
• Accounts Receivable
• Accounts Payable
• Bank Manager
In a good accounting system, the modules are fully integrated. When the system is integrated, the modules share common data. For example, a client sales transaction can be entered in as an invoice, which automatically posts to the General Ledger module without re-entering any data. This is one of the greatest advantages of a computerized accounting system – you need to enter the information only once. As a result of this:
• Data entry takes less time.
• There is less chance that errors will occur.
• You do not have to re-enter data for posting.