Computerized Accounting involves making use of accounting software and computers to record, store and analyse financial data. It is one of the best ways to run the business effectively. A computerized accounting system brings with it many advantages that are unavailable to analog accounting systems.
Ø Computers require far less time than human beings in performing a particular task like calculating, writing and so on. Therefore, accounting data is processed faster using a computerized accounting system.
Ø Computerized accounting provides less space for error because only one account entry is needed for each transaction unlike repeated posting of the same accounting data in manual system.
Ø As computer is not any living creature so they are immune to boredom, tiredness or fatigue. Therefore, these can perform repetitive functions effectively and are highly reliable as compared to human beings.
Ø We can get the information in easy way and it is also good because in one-time information can be shared with many others. The data can be made available to different users at the same time. This is called data sharing.
Ø Account balances will always be up to date since the records are automatically updated as and when accounting data is entered or stored.
Ø The computer-based accounting system ensures better use of time and resources.
Ø Computer based systems require a fractional amount of physical space as compared to the books of accounts in the form of journals, ledgers and accounting registers.
Ø The system will require staff to be trained to use new skills, which can make them feel more motivated Employees using computer systems feel more valued as they are trained and specialized for the job, it provides comfort in case of searching any data or can be any kind of journal.
Ø One of the good things about computer-based accounting is that it provides reports like cash book, trial balance and financial statements are generated automatically and are easily accessible just by a click of mouse.
Ø Real-time financial information: Computerised accounting systems are synchronised and aligned with your online bank account. This means you will always have access to up-to-date information on whether invoices are being paid by your customers, as well as your business outgoings
Ø Save money on resources: By streamlining your accounting and bookkeeping processes by using a computerised system, you (or a member of staff) won’t need to spend as much time managing your financial information. This will lead to cost-savings – many computerised accounting systems can be provided by way of an affordable monthly subscription fee.
Ø Innovative financial technology: Many computerised accounting systems are cloud-based, which means you can download apps for mobile phones and tablets. This enables you to check your accounts at any time, no matter where you are in the world & this thing play an effective role in your business.
Ø Faster record-keeping leads to more business: Due to automated complex calculations, continual awareness of your finances, and less time spent on processing and checking your accounts, you can spend more time focusing on your business operations and increasing your profit margin.
As above are some advantages of Computerized Accounting. If you have not computerized your accounting you should seriously consider doing so.