Essay
Unit 8 D1
- Module
- Unit 8 - Accounting Systems
- Institution
- Pearson (PEARSON)
Essay of 2 pages for the course Unit 8 - Accounting Systems at PEARSON (Unit 8 D1)
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By: Samantha1738 • 7 year ago
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Joshua Ojutalayo Unit 8Introduction
In this assignment, I will analyse the circumstances under which a business would adopt a
computerised accounting system instead of a manual one.
Both the computerised and manual accounting systems have their pros and theircons.
However factors like the size, type and transactions will determine whether the business
would have to adopt a computerised system over the manual method.
The computerized software is more efficient and beneficial as it has more functions and can
perform multiple tasks at the same time. It is also streamlined and easy to use. For example,
it generates invoices, trading, profit and loss accounts and balance sheets effortlessly. On top
of that, reports can be represented in the form of tables and charts to be easily interpreted.
The software also has integrated payroll models, which enables firms and businesses to
present their work in a professional manner.
Another advantage of the computerized accounting system is that businesses can have free
trials to check whether the software is suitable for their purpose.
Additionally, the computerized accounting softwares can prove to be more cost-efficient in
the long run as the business will only have to pay once for software and upgrades, instead of
paying continuously for the salary of accountants.
Moreover, it gives instant access to finance and accounting information (sales,
purchases and general ledgers), which enable easy management as there is transparency
concerning expenses and assets. Contacts of customers and suppliers are also easily available
as it will be saved in the database.
Nowadays, all leading accountancy firms, such as Deloitte, Ernst & Young and Price
Waterhouse Coopers, are wellknown for their outstanding tax services, balance
sheets, income statements and cash flow statements. Such types of flourishing
businesses rely on computerized accounting softwares to perform their day-to-day duties. As
they work with big businesses and transactions, the manual accounting will not be a
favourable technique as accountants will have to deal with huge figures and this can lead to
serious mistakes in the records.
Furthermore, they have to keep records of their works for several years to comply with the
law. If they were to use the manual accounting, they will be flooded with papers and
documents and it will be inconvenient to store everything for records. Therefore, they use the
computerised database to do so, as the data is then easily retrievable and more secure (cannot
be stolen or lost). This feature of the software also reduces work-related pressure as
employees will not have to spend time sorting, storing and finding documents as all the data
will be in soft copy and available instantly with the click of a button.
Globalisation is a process of interaction between countries in order to develop the
global market and economy and strengthen links. This has led to businesses
switching over to the computerized accounting method as it enables data to be shared
efficiently and without much effort. Today, businesses do not necessarily have to wait for
data to come by post as a report, because the computerised system can do so instantly,
therefore enabling businesses to become multi-nationals.
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