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Computerized Accounting

Discuss Computerized Accounting within the Basics of Computers forums, part of the Resolve Your Query - Get Help and discuss Projects category; ROLE OF COMPUTERS IN ACCOUNTING Computers play a very significant role in today’s modern and competitive world. In order to ...

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Sunanda K. Chavan
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Computerized Accounting - September 8th, 2010

ROLE OF COMPUTERS IN ACCOUNTING


Computers play a very significant role in today’s modern and competitive world. In order to survive, it is essential to perform Business Operations efficiently at a very high speed.

Use of spread sheets, data base word processor helps the Business Organization in efficient functioning of the activities.

Word processor is used for drafting reports, documents, statements, etc. Spread Sheets are becoming popular for the preparation Salary Statements of employees, Financial Statements, etc In present world, it is possible to get the whole accounting work done on Computers.

Besides spread sheets ‘Data Base’ and ‘Word Processor’, computers are very useful for certain accounting operations such as preparation of:


General Ledger:

Here the ledger accounts are updated in a fraction of second, once the transactions are fed into the computer.


Debtors Ledger:

This ledger provides the current status of the debtors and reminders can be sent to those who are delaying payments.


Creditors Ledger:

It provides current status of the creditors and helps to meet the obligations on time.

Stock Ledger:

The information is quickly provided regarding the status of various items in possession, the receipts and issues of all items, etc.
It also facilitates Inventory Control.

Salary Ledger:

By using Payroll Accounting Software, salary statements of any number of employees can be prepared in a fraction of second.

ADVANTAGES OF COMPUTERISED ACCOUNTING


There are many advantages of computerized accounting as some of them are listed below:
>>>>Speed of Recording:
The data entry on computers is relatively fast as compared to manual accounting because of the following factors:

(a) There is no need to type the full name of the account as the accounts are already accessed either through codes or through few starting alphabets.
Eg. The code for Printing &Stationery may be “10PRST”which means one has to type 6-digit code, the account “Printing &Stationery” can be invoked.

(b)The data which is repeatedly used, can be duplicated.
Eg. If one starts to input vouchers for 1-4-96, the dates need not be given for every voucher. Each subsequent voucher will presume that date which is same as the earlier voucher till the user specifically issues the commands to change the date

The narrations written in the day books automatically go to the ledger which is either not possible in manual accounting system & it is also time consuming.


Arithmetical Accuracy:
It is religiously ensured by the financial accounting software & the
accounts clerks are not required to break their heads & spend days
together in locating the mistakes in the Trial Balance. The Trial balance
being always accurate, the accountants can divert their manpower & energy towards more fruitful areas.


Quick Availability of Reports:
This is the most striking feature of computerized accounting system.In the presently available software, most of the required reports are defined & built into the software & the user has to just press few keys for generating the required reports.


Detailed Analysis Possible:
The manual accounting is hardly reliable for analytical exercises.
Eg. If the accountant wants to know that how many times a particular person has claimed for traveling expenses during an year along with the amounts claimed each time, it would be very difficult to extract this information from ledger if sufficient narrations are not written But such analysis is made on computers in few seconds.This is commonly known as “Filtering the data” or “Query Facility”.

Allied Work At No Extra Efforts:

The computers can do certain allied work which is based on accounting data.
Eg. If the recovery department wants to concentrate on debtors whose balances are more than Rs. 50,000 & the amount is outstanding more than a period of 3 months.

The computer can quickly scan through the data base , select the records which match the above criteria & also generate reminder letters to be sent to the concerned party.

Paperless Office:

The advancement in the field of computers has made reduction in the use of paper work.

Today’s businessmen have started to dream practically about having paperless office wherein all employees have an computer on their tables & will have to access to an common database.


TALLY is one of the most popular software accounting package, which has come from our own country-India. It has developed by Peutronics Pvt. Ltd. The name Tally itself tells us what it can do, tally or tallying of things. Besides, it also can take care of Inventory and Password security.

Tally has various features built in, hence, it does not require any coding and so easy to handle. The account keeping is in the same manner as manual accounting with doors open for correcting human errors, making classification possible, tracking made easier and faster speeds.

Various Indian software’s like Tally are available in the market. For example, Bahi-khata.

Manual book keeping v/scomputerised accounting?.

1) In manual book-keeping,you first create ledgers,carry forward previous year's closing balance as opening balance for the current year record cash transaction in cash book and non cash transaction in journal and then posting the amounts of both in the respective ledgers.

Whenever you need to know balance of any ledgers ,you are required to total amount in both debit and credit columns of the ledgers and compute the differenceto derive the closing balance for the ledger as on date.to prepare final account for any period,you have to compute closing balance of the ledgers for that period and then preparea trial balance and from that you post the nominal account to profit and loss account,real andpersonal ledgers to balance sheet as the posting is done manually this leaves enough room for errors to occur and even after spending few sleepless nights,if accountant do not match ,they are focused to leave an entry in final accounts difference in trial balance having no explaination arises.

When you opt for first time ,you have to create the ledgers and enter opening balance and classify at this stage thereafter you enter all transactions in vouchers. that all you have to do and everthing else is done by the software itself. in computerized accounting relevant accounts group has to be specified and that will appear on the screen.

In computerised accounting the chances of errors are reduced as all the work is done through the use of machines and hence no explanation is needed.
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Re: Computerized Accounting - December 17th, 2015

Most organization use computer systems rather then manual systems
to keep track record of finical information as it is faster and easily be shared. That is why so many businesses are now using computerized accounting system. Computerized accounting system able them to work with more accuracy.
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Bhautik Kawa
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Re: Computerized Accounting - February 26th, 2016

Quote:
Originally Posted by sunandaC View Post
ROLE OF COMPUTERS IN ACCOUNTING


Computers play a very significant role in today’s modern and competitive world. In order to survive, it is essential to perform Business Operations efficiently at a very high speed.

Use of spread sheets, data base word processor helps the Business Organization in efficient functioning of the activities.

Word processor is used for drafting reports, documents, statements, etc. Spread Sheets are becoming popular for the preparation Salary Statements of employees, Financial Statements, etc In present world, it is possible to get the whole accounting work done on Computers.

Besides spread sheets ‘Data Base’ and ‘Word Processor’, computers are very useful for certain accounting operations such as preparation of:


General Ledger:

Here the ledger accounts are updated in a fraction of second, once the transactions are fed into the computer.


Debtors Ledger:

This ledger provides the current status of the debtors and reminders can be sent to those who are delaying payments.


Creditors Ledger:

It provides current status of the creditors and helps to meet the obligations on time.

Stock Ledger:

The information is quickly provided regarding the status of various items in possession, the receipts and issues of all items, etc.
It also facilitates Inventory Control.

Salary Ledger:

By using Payroll Accounting Software, salary statements of any number of employees can be prepared in a fraction of second.

ADVANTAGES OF COMPUTERISED ACCOUNTING


There are many advantages of computerized accounting as some of them are listed below:
>>>>Speed of Recording:
The data entry on computers is relatively fast as compared to manual accounting because of the following factors:

(a) There is no need to type the full name of the account as the accounts are already accessed either through codes or through few starting alphabets.
Eg. The code for Printing &Stationery may be “10PRST”which means one has to type 6-digit code, the account “Printing &Stationery” can be invoked.

(b)The data which is repeatedly used, can be duplicated.
Eg. If one starts to input vouchers for 1-4-96, the dates need not be given for every voucher. Each subsequent voucher will presume that date which is same as the earlier voucher till the user specifically issues the commands to change the date

The narrations written in the day books automatically go to the ledger which is either not possible in manual accounting system & it is also time consuming.


Arithmetical Accuracy:
It is religiously ensured by the financial accounting software & the
accounts clerks are not required to break their heads & spend days
together in locating the mistakes in the Trial Balance. The Trial balance
being always accurate, the accountants can divert their manpower & energy towards more fruitful areas.


Quick Availability of Reports:
This is the most striking feature of computerized accounting system.In the presently available software, most of the required reports are defined & built into the software & the user has to just press few keys for generating the required reports.


Detailed Analysis Possible:
The manual accounting is hardly reliable for analytical exercises.
Eg. If the accountant wants to know that how many times a particular person has claimed for traveling expenses during an year along with the amounts claimed each time, it would be very difficult to extract this information from ledger if sufficient narrations are not written But such analysis is made on computers in few seconds.This is commonly known as “Filtering the data” or “Query Facility”.

Allied Work At No Extra Efforts:

The computers can do certain allied work which is based on accounting data.
Eg. If the recovery department wants to concentrate on debtors whose balances are more than Rs. 50,000 & the amount is outstanding more than a period of 3 months.

The computer can quickly scan through the data base , select the records which match the above criteria & also generate reminder letters to be sent to the concerned party.

Paperless Office:

The advancement in the field of computers has made reduction in the use of paper work.

Today’s businessmen have started to dream practically about having paperless office wherein all employees have an computer on their tables & will have to access to an common database.


TALLY is one of the most popular software accounting package, which has come from our own country-India. It has developed by Peutronics Pvt. Ltd. The name Tally itself tells us what it can do, tally or tallying of things. Besides, it also can take care of Inventory and Password security.

Tally has various features built in, hence, it does not require any coding and so easy to handle. The account keeping is in the same manner as manual accounting with doors open for correcting human errors, making classification possible, tracking made easier and faster speeds.

Various Indian software’s like Tally are available in the market. For example, Bahi-khata.

Manual book keeping v/scomputerised accounting?.

1) In manual book-keeping,you first create ledgers,carry forward previous year's closing balance as opening balance for the current year record cash transaction in cash book and non cash transaction in journal and then posting the amounts of both in the respective ledgers.

Whenever you need to know balance of any ledgers ,you are required to total amount in both debit and credit columns of the ledgers and compute the differenceto derive the closing balance for the ledger as on date.to prepare final account for any period,you have to compute closing balance of the ledgers for that period and then preparea trial balance and from that you post the nominal account to profit and loss account,real andpersonal ledgers to balance sheet as the posting is done manually this leaves enough room for errors to occur and even after spending few sleepless nights,if accountant do not match ,they are focused to leave an entry in final accounts difference in trial balance having no explaination arises.

When you opt for first time ,you have to create the ledgers and enter opening balance and classify at this stage thereafter you enter all transactions in vouchers. that all you have to do and everthing else is done by the software itself. in computerized accounting relevant accounts group has to be specified and that will appear on the screen.

In computerised accounting the chances of errors are reduced as all the work is done through the use of machines and hence no explanation is needed.
Hello Friend,

Please check attachment below for Study on Computerised Accounting System.
Attached Files
File Type: pdf Study on Computerised Accounting System.pdf (293.5 KB, 0 views)


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