What is computer accounting?
Computer accounting has been growing in popularity since the availability of the Internet as a worldwide communication medium began to grow. When computer accounting is mentioned, it does not only refer to its use by professional accountants. Often non-accountants use computers for family financial record-keeping of expenditures, taxes and other household matters. Some individuals balance their checkbooks online through the use of computer accounting techniques. This article looks at the functions of computer accounting, its advantages and disadvantages.
Individuals and companies both big and small manage their money and assets one way or another. They hire accountants to help them carry out the mathematical requirements of accounting and balancing their books. Before the Internet became pervasive, these accounting protocols were performed manually. Today many accountants and non-accountants alike use computer software to perform these duties. Nevertheless, this convenience has positive and negative sides. Let us first explore some of the benefits of computerized accounting.
Advantages of computer accounting
One of the important advantages of computer accounting is that it is efficient. In less than half the time needed for traditional, non-computer accounting, you can complete the required functions through computerized programs. Specialized accounting software, such as Acclaim or Quicken Personal Finance, can facilitate your personal or business accounting and save you valuable time.
Computer accounting saves time and, therefore, saves you money. Small businesses may not require an expensive accountant for their operations. Savvy owners, who are a little familiar with basic accounting procedures, can save money by buying dependable accounting software that they can use themselves. Once the software is installed, the program guides you step by step through the accounting process.
Computerized accounting methods are very efficient. They eliminate the human error factor, which is common with non-computerized accounting. The computer accounting process makes it easier to record your transactions, perform calculations and keep records from day to day. Such data could also be downloaded into spreadsheets and graphic illustrations for presentations.
Disadvantages of Computerized Accounting
There are some disadvantages to computerized accounting. It may be challenging for those living in countries where a power supply is not steady. Another issue is the threat of viruses, which can destroy your data and files with no warning. Backing up data on a remote data storage system may help you safeguard your valuable accounting information.
Internet security is a problem that continues to confront everyone, regardless of how sophisticated the security software is. Hackers are always one step ahead and are able to penetrate and steal data from unlikely places. Also there are issues with badly programmed or inadequate software that could lead to a wrong accounting outcome.