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Computerized Accounting System

IT has made it easier for companies to develop and use computerized systems to track and record financial transactions. Computerized accounting systems have also improved the functionality of accounting departments by increasing the timeliness of accounting information. Faster processing times for individual transactions has also lessened the amount of time needed to close out each accounting period.

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Cikgu Adawiyah
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361 views

Computerized Accounting System

IT has made it easier for companies to develop and use computerized systems to track and record financial transactions. Computerized accounting systems have also improved the functionality of accounting departments by increasing the timeliness of accounting information. Faster processing times for individual transactions has also lessened the amount of time needed to close out each accounting period.

Uploaded by

Cikgu Adawiyah
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Computerized Accounting System

he biggest impact IT has made on accounting is the ability of companies to develop and use computerized systems to track and record financial transactions. Paper ledgers, manual spreadsheets and hand-written financial statements have all been translated into computer systems that can quickly present individual transactions into financial reports. Most of the popular accounting systems can also be tailored to specific industries or companies. This allows companies to create individual reports quickly and easily for management decision making. Additionally, changes can be made relatively easy to reflect any economic changes in business operations. Increased Functionality Computerized accounting systems have also improved the functionality of accounting departments by increasing the timeliness of accounting information. By improving the timeliness of financial information, accountants can prepare reports and operations analyses that give management an accurate picture of current operations. The number of financial reports has also been improved by computerized systems, departmental profit and loss, and market share reports are now more accessible with computerized systems.

Improved accuracy Most computerized accounting systems have internal check and balance measures to ensure that all transactions and accounts are properly balanced before financial statements are prepared. Computerized systems will also not allow journal entries to be out of balance when posting, ensuring that individual transactions are properly recorded. Accuracy is also improved by limiting the number of accountants that have access to. Less access by accountants ensures that financial information is adjusted only by qualified supervisors.

Faster Processing Computerized accounting systems allow accountants to process large amounts of financial information and process it quickly through the accounting system. Quicker processing times for individual transactions has also lessened the amount of time needed to close out each accounting period. Month- or year-end closing periods can be especially taxing on accounting departments, resulting in longer hours and higher labour expense. Shortening this time period aids

companies in cost control, which increases overall company efficiency. Better External Reporting Reports issued to outside investors and stakeholders have been improved by computerized

accounting systems. Improved reporting allows investors to determine if a company is a good investment for growth opportunities and has the potential to be a highvalue company. Companies can utilize these investors for equity financing, which they use for expanding business operations.

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