Computerized accounting systems include the use of computers and a software application or program to aid companies in recording, reporting and analyzing financial information. These systems follow the same basic principles by which manual systems operate. Software applications make use of ledgers, journals and other accounting tools much like traditional manual accounting systems. However, computerized accounting can increase the effectiveness and efficiency of a company's accounting process.


Computerized accounting systems enhance the workflow of a company’s financial information. Rather than using employees to input financial transactions into the general ledger, computerized accounting systems can import this information electronically. Owners and managers can also set up internal procedures in an accounting software application to process information according to specific rules and guidelines. This allows accountants to spend more time reporting and analyzing information rather than inputting the data.


Business owners and managers can use computerized accounting systems to create a more secure environment for their financial information. Computerized accounting systems allow owners and managers to restrict employee access to certain financial information. This ensures that employees cannot manipulate information or use it for their personal advantage. Passwords, encryption codes and other features help managers keep information secure from inappropriate use. Larger organizations can also use computerized accounting systems to improve their internal controls.


Reporting is often much easier when using a computerized accounting system. Companies can create cost reports, trial balances and financial statements at the click of a button. Doing so also helps owners and managers to more quickly review their information to ensure that it is accurate, relevant and timely. Computerized accounting systems also allow owners and manager to create multiple reports throughout the accounting period. Multiple reporting can help create a timelier review process to ensure that no irregularities exist in the company’s accounting or financial information.