Accounting records have been maintained only on a manual basis for a period now. The bookkeeper or the owner is required to fill a paper source document for each sale or receipt, and then work overtime writing the transactions of the day or week in special journals, stock cards, and debtor and creditor records. This obviously took some time, time that would otherwise have been spent operating the business. The business also pays extra money to account officers as overtime bonus. Consequently, completing the accounting records was sometimes seen as an impediment to business, rather than a tool of making it more profitable.
However, the development of computerized accounting systems has changed the way most businesses including small and medium scale enterprises keep their accounting records. A computerized accounting system involves the use of computer hardware and software to perform the recording, summarising, analysing and reporting functions that would otherwise have been done manually. This has allowed small business owners to make their accounting processes more efficient, thus leaving them more time to work on their core business. They are also able to take effective decisions on financial and monetary matters.
The widespread use and adoption of computerized accounting systems over the last few years can be attributed to the following factors:
Availability and affordability of hardware and software
The lower price of computer hardware has made it accessible to all people. A desktop or laptop computer can be purchased for less than GHS 1000. Also the computers of today are more powerful and can perform more complex functions. Small and medium sized businesses can now buy ‘off the shelf’ accounting programs at remarkably low cost if not free. Larger businesses will often have customized programs made for their business at a relatively cheaper cost. The accounting programs carry out functions such as invoicing, dealing with payments, paying wages and providing regular accounting reports such as trading and profit and loss accounts and balance sheets. Thus the software programme covers most accounting activities.
Contemporary accounting software can be operated with only a basic understanding of the accounting process, with manuals, extensive help menus and even online resources to assist users in their use of that software. By contrast, early accounting software required not only IT skills, but also detailed accounting knowledge. For examples, Oracle which was used in early times required ICT experts, and professional accountants because of its complex nature. But modern accounting software like Tally Accounting and QuickBooks can be operated by a lay man with just minimal training.
The growth of e-commerce
The growth of the internet has created new methods of communicating with both suppliers and customers, current and potential. E-commerce is changing not only the way businesses market their goods and services, but also the nature of those goods and services, and the way they are delivered. Proficiency with computers is obviously essential in this process. Computers have become so common in the operation of small businesses that it would now be unusual to find any but the smallest of businesses using a manual system.
There are general software as well as detailed accounting software that are used by businesses for their accounting applications. whiles the general software are normal ICT application that can be used in all fields, the detailed accounting packages are customized and can be applied to only the accounting field. General ICT Applications
The ever changing technology brought brand new ways of completing any kind of tasks rapidly. It also helps us to produce data and maintain files in a clear manner. The field of accountancy is not an exceptional case. It has got tremendous improvements with the help of the...