Advantages & Disadvantages of a Computerized Accounting System
The field of accounting relies on precise organization and analysis of numbers and financial data. This makes it an ideal place for computerized tools to make the lives of human accountants easier and allow businesses to produce more accurate financial reports. But to have a positive impact, computerized accounting systems require careful planning and awareness before implementing them.
Accountants who have access to computerized accounting systems can work more quickly and enjoy increased productivity. The software allows accountants to make changes faster than adjusting a printed ledger or chart. Less time spent processing data gives accountants more time to analyze the data and get the most use out of it. Displaying financial data on computer screens is also more efficient and environmentally friendly than printing paper reports for even small tasks. Data organization tools make it easy to find specific pieces of information at any given time.
A computerized accounting system reduces the risk of human error. Computers process numbers and perform calculations with 100 percent accuracy, which eliminates the possibility of a mathematical error leading to an inaccurate result. Accounting software also makes regular backups of key data for retrieval in the event of a system failure or security breach. While there is still room for error in the case of data entry, accounting software can identify inconsistencies and even help correct simple mistakes.
Updating a traditional accounting department to use a computerized system can represent a significant cost, especially for a larger business. Besides reorganizing personnel and buying the accounting software a business must also invest in new computers, regular software updates, training and a new recruiting policy to hire accountants who are familiar with the system or can learn to use it quickly.
Despite their advancing complexity, computerized accounting systems can't fully replace human accountants. The field of accounting requires judgment decisions and improvisational thought, which even the most sophisticated piece of software can't do. Accountants also need to understand the changing landscape of legal regulations and company policies, some of which find their way into new versions of computerized accounting systems and others that control how accountants use their computerized tools.