Information technology impacts every industry, from the financial, medical and legal professions to entertainment, and healthcare. IT streamlines processes and automates systems whenever possible, as well as granting access to a wealth of information that was not so long ago out of reach. IT also plays an increasingly vital role in accounting.
You would be hard-pressed to find anyone doing manual accounting using just paper, pens, and calculators these days. Most modern-day accounting functions involve use of a computer, and since accounting deals with business information any IT advances can directly and positively impact the accounting department of all organizations.
Manual Vs computerized accounting
Manual accounting, whereby accountants record information using paper ledgers and journals, while potentially more detailed, is also vulnerable. Damage can be caused by fire, damp and flooding, to name just a few risks. The data needs to be secured well and taken care of properly so that it is not at risk of being lost or stolen either.
Computerized accounting utilizes software programs with digital spreadsheets to record and report financial information automatically and electronically. These systems are derived from traditional, manual accounting systems.
Backing up computerized accounting information is crucial, but it is far easier and quicker to achieve than it is with physical paperwork. Formulas can be automated using specially-designed software and data retrieved and stored in one location with the help of computing technology. Plus, there is virtually no limit as to how much information you can store, making this method extremely convenient, especially if you have a mass of information.
Furthermore, manual accounting can be incredibly tedious, with accountants spending a significant amount of time checking numbers and cross-referencing them with the organization’s accounting information. Simple mistakes can create significant errors that often take a sizeable amount of time and effort to rectify. On the contrary, computerized accounting systems allow accountants to work faster and process more information. This allows for easier review processes that in turn enable accountants to spend less time looking for errors and more time focusing their efforts on other crucial tasks, such as interpreting data to support decision making.
How technology helps: Advantages of computerized accounting
To implement computerized accounting, organizations have to invest in equipment and software, such as computers, printers, scanners, and faxes, as well as spreadsheet programs and other accounting programs that are efficient at calculations and financial reporting. There are numerous software options that can help streamline daily tasks, including invoice payment, recording transactions, and creating and delivering reports. Furthermore, data is organized and stored in a centralized location.
While it appears that the initial cost of accounting equipment and software might be a turn-off, it is worth keeping in mind that the return on investment could make this capital outlay worthwhile. You may save far more valuable resources, such as time, effort and space, in time.
Computerized accounting also leverages the Internet, which allows data to be shared virtually anywhere. It also benefits research tasks and online filing of taxes. Another great advantage of computerized accounting is increased security, with password-protection limiting access to important, confidential information. Furthermore, lost, stolen, or misplaced laptops and computers can be tracked using advanced security software.
IT and accounting add up and make sense. If you want some help in calculating the value of IT support and solutions then get in touch today.
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