Computerized Accounting Environment
Computerized accounting system is a software that helps businesses to manage the big financial transactions, data, reports, and statements with high efficiency, speed, and better accuracy. Better quality work, lower operating costs, better efficiency, greater accuracy, minimum errors are some of the advantages of Computerized Accounting.
Need for Computerized Accounting
Its need arises from the benefits of speed, accuracy and lower cost of handling the business transactions. Also, it has the capability to record a large number of transactions with speed and accuracy. It allows quick and quality reporting because of its speed and accuracy.
Manual accounting system requires large storage to keep accounting records, and vouchers. The requirement of books and stationery and books of accounts along with vouchers and documents is dependent on the volume of transactions.
There is a need to reduce the paperwork and dispense with a large volume of books of account. This can be achieved working with the help of computerized accounting system.
Features of Computerized Accounting Environment
This Accounting System and its awareness among entities have become a necessity in the present environment. Businesses of whatever field and size are shifting from the practice of maintaining accounts manually. The manual process is more time-consuming and exposed to human error.
Storage and retrieval of data and generation of a report cannot be ensured in real time in the traditional system. There is a need to shift to computerized accounting systems. They have empowered business to project accurate information of financial performance.
Simple and Integrated: It helps all businesses by automating and integrating all the business activities. Such activities may be sales, finance, purchase, inventory, and manufacturing etc. It also facilitates the arrangement of accurate and up-to-date business information in a readily usable form.
Accuracy & Speed: Computerized accounting has customized templates for users which allows fast and accurate data entry. Thus, after recording the transactions it generates the information and reports automatically.
Scalability: It has the flexibility to record the transactions with the changing volume of business.
Instant Reporting: It can generate a quality report in real time because of high speed and accuracy.
Security: Secured data and information can be kept confidential as compared to the traditional accounting system.
Quick Decision Making: This system Generates real-time, comprehensive MIS reports and ensures access to complete and critical information, instantly.
Reliability: It generates the report with consistency and accuracy. Minimization of errors makes the system more reliable.
Advantages of Computerized Accounting
Better Quality Work: The accounts prepared with the use of computerized accounting system are usually uniform, neat, accurate, and more legible than a manual job.
Lower Operating Costs: Computer is a reliable and time-saving device. The volume of job handled with the help of computerized system results in economy and lower operating costs. The overall operating cost of this system is low in comparison to the traditional system.
Improves Efficiency: This system is more efficient in comparison to the traditional system. The computer makes sure speed and accuracy in preparing the records and accounts and thus, increases the efficiency of employees.
Facilitates Better Control: From the management point of view, there is greater control possible and more information may be available with the use of the computer in accounting. It ensures efficient performance in accounting records.
Greater Accuracy: Computerized accounting make sure accuracy in accounting records and statements. It prevents clerical errors and omissions in records.
Relieve Monotony: Computerized accounting reduces the monotony of doing repetitive accounting jobs. Which are tiresome and time-consuming.
Facilitates Standardization: Computerized accounting provides standardization of accounting routines and procedures. Therefore, it ensures standardization in the accounting records.
Minimizes Mathematical Errors: While doing mathematical work with computers, errors are virtually eliminated unless the data is entered improperly in the system.
SAP
Traditional business models often decentralize data management, with each business function storing its own operational data in a separate database. This makes it difficult for employees from different business functions to access each other’s information. Furthermore, duplication of data across multiple departments increases IT storage costs and the risk of data errors.
By centralizing data management, SAP (System Analysis Program Development/ Systems, Applications & Products in Data Processing) software provides multiple business functions with a single view of the truth. SAP system consists of a number of fully integrated modules, which covers virtually every aspect of business management. This helps companies better manage complex business processes by giving employees of different departments easy access to real-time insights across the enterprise. As a result, businesses can accelerate workflows, improve operational efficiency, raise productivity, enhance customer experiences – and ultimately increase profits.
TALLY
Tally is an accounting program that gives benefit to track and manage all accounts, sales, debts, and everything else related to the running of a business. It has different versions. Tally 9 ERP is primarily used in India, and one can test it out for free. With Tally, you can track all of your expenses with just a few keystrokes. Tally ERP 9 has the following step to create and record vouchers:
Part-1: Setting Up Tally
1. Install the Tally software
2. Navigate Tally
3. Create a company
Part-2: Creating Ledgers
1. Understand what ledgers are for
2. Open the Create Ledger window
3. Select the group
4. Give the ledger a name
5. Enter an opening balance
Part-3: Creating Vouchers
1. Understand the purpose of vouchers
2. Open the Vouchers page
3. Choose the voucher you want to create
4. Enter in the required information
ERP
Enterprise Resource Planning (ERP) is an integrated business process management system, for both software and technology that manages a company’s core business processes. The ERP suite of integrated applications allows an organization to use a system to collect, store, interpret and manage the business, as well as automate back-office functions related to technology, services and human resources.
The “R” in ERP refers to the critical resources, notably materials, people, equipment, energy, and cash, to accomplish the work that needs to be done. These resources are tracked against commitments, such as orders or accounts payable, in order to make sure supply and demand will be accommodated with minimal waste and cost.
This resource-oriented objective of ERP reflects its origin as a tool for the manufacturing industry. Over several decades, commercial ERP vendors have added capabilities that prove useful in many other industries as well.
ERP provides an integrated and up-to-date view of core business processes to track business resources, such as cash, inventory raw materials and production capacity, as well as the status of financial business commitments related to purchasing and accounting.
Source: Mohammad Shahajahan FCS CPFA
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