Question

Explain the importance of computerized accounting system.

Answer 1

1. Automation: All the calculations are automatically done by the accounting software with minimum time as compared to manual accounting calculations.
2. Multi-user-Facilities: Multi-user-facility enable the business man access accounting information online or offline with more user controls outside of the office or within the office. In big business houses, this facility is useful as data entry can be done by many operators on different computers simultaneously.
3. Accuracy: Computerized accounting software is more accurate as compared to human being. All calculations, like additions, subtractions and statistical calculations are automatically done by software.
4. Speed: Computerized accounting software work faster than manual accounting process. It generates all financial statements and reports speedily as per user requirements.
5. Reduction in Cost: As the financial records are to be entered only once in the system the accountant will save his time in maintaining the records. This will enable the business organization to employ few accounting personnel.
6. Systematic and up to date records: Computerized accounting system ensures systematic and up to date financial records of the business organization.
7. Huge Storage Capacity: In case of manual accounting it is required to maintain separate Books and Registers for each financial year. In case of computerized system one computer software can store the accounting records for many years.
8. Compact: No matter how voluminous the financial data is the computer can store it in a compact way. The financial information can be stored on the hard disk and if required backups can be taken on the external storage devices which requires very little space.
9. Transferability/Sharing Information: Computerized accounting system allow the business organization to share the financial information with the interested parties. The information can be shared with the help of printouts or can also be shared with soft copy i.e through pen drive or Internet transfer.