Companies often use a computerized accounting system to process and maintain accounting transactions and records. The system absorbs and stores this data by using modules such as accounts payables, accounts receivables, trial balance and payroll. A computerized accounting system is either specifically designed for a certain company or it is purchased from a third-party (e.g. Timberline or MAS 200). A computerized accounting system is a valuable tool for many companies.
The system processes data rapidly. Once the information is keyed into the related module such as payroll or accounts payable, the system processes and stores it instantly.
The majority of computerized accounting systems have features such as order-entry and generation of associated invoices. The employer can create accounts for their clients, storing their names, addresses, orders and invoices for as long as necessary. A computerized system also allows the employer to make and print account statements. Further, many accounting systems have a payroll feature, which enables complete payroll processing, including the generation and printing of checks and reports.
The employer is able to print and reprint customer orders, invoices, and all other accounting transactions as required. He can also easily find employees’ payroll data such as current address and pay amount without having to search through filing cabinets to locate personnel files.
Eradicates Manual Processing
A computerized accounting system eliminates manual processing. The latter involves processing and recording the company’s incomes, expenses, profits, losses, and reconciliation by hand, creating much room for error. Payroll transactions and the business’ tax transactions are also recorded manually. With a computerized accounting system, the employer has a smoother record-keeping and balancing process.
A computerized accounting system often requires the staff to undergo training to learn new skills, making them feel motivated. Further, the employer can outsource training to a representative from the software company, creating less pressure on staff members to administer the training themselves.
If the federal or state government decides to audit the company, a computerized accounting system simplifies the process. Normally, before the audit takes place, the auditor notifies the employer by mail about the specific documents required for the audit. Depending on the nature of the audit, documents may include tax statements, payroll registers and chart of accounts.
A computerized accounting system can store many years of information. If the audit requires it, the employer can access information dating from many years back. If, during the audit, the auditor spontaneously requests an accounting document, the employer can quickly retrieve it from the system instead of rummaging through storage boxes to locate hard copies.
A computerized accounting software makes it difficult for employees to steal money from the company. For example, if a payroll employee tries to pay herself more than the allowed amount, her theft will most likely be discovered because the accounting system stores all saved transactions.
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