Implementing a Computerized Accounting System

Implementing a Computerized Accounting System

For any organization, keeping accurate financial records is imperative to ensure success. Equally important is the need to understand the different options available, their efficiency, and demerits.  While bookkeeping can come in handy, especially for small organizations, business entities conducting multiple business transactions on a daily basis require a computerized accounting system (Warren et al. 261). Most of the functions are automated, thus allowing for effective financial reporting.

Computerized accounting systems (CAS) refers to software programs accessible remotely via a network server or stored in the firm’s information system (Gilbertson et al., 115). When choosing the appropriate option, considering the software capabilities and features is fundamental especially regarding how best the CAS matches the business operations. Off-the-shelf accounting software package is the least expensive and is often pre-developed. Therefore, it is the most appropriate option for a start-up small business entity. However, its downside is that it cannot handle tedious and complicated accounting calculations effectively. Besides, this kind of software requires the firm to modify its processes to match the CAS functionality. Examples of off-the-shelf accounting software package include Sage, Bookkeeper, and Sage (Knudtzon et al. 32). On the other hand, businesses with complex accounting department need a customized system that is tailored for accounting specifications. A system such as this is faster and is most effective in handling large business operations. Their functionality cannot be found in other accounting systems such as Quick books and Sage because it is possible for the user to cut out unnecessary mass-marketed programs (Scott 33). The disadvantage of this system is that it is expensive and requires a high maintenance cost.

Computerized accounting system allows financial analysts and accountants to set up the organization’s expenses and periodic income accounts. Additionally, they are usable in the preparation of budgets, payment of bills and management of bank accounts. By automating the execution these processes, the system eliminates the need for manual labor, hence minimizing the operational cost and human error.

Work Cited

Gilbertson, Claudia B, and Mark W. Lehman. Fundamentals of Accounting. Mason, Ohio: South-Western, 2013: 103-142. Print.

Knudtzon, Kermit, and Charles Luther Schmidling. "Computerized Accounting Systems and Methods." U.S. Patent No. 7,120,597. 10 Oct. 2011: 1-56. Print.

Scott, Cathy. College Accounting: A Career Approach. , 2014: 30-42. Print.

Warren, Carl, James Reeve, and Jonathan Duchac. Financial & Managerial Accounting. London: Cengage Learning, 2013: 260-274. Print.