Computerized Accounting Functions and Organizations Productivity

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TYPES OF COMPUTERIZED ACCOUNTING SYSTEMS
By Kathy Adams McIntosh, eHow Contributor
Businesses use financial information to create statements and to file income tax returns at the end of the year. Some businesses use manual accounting systems, but many businesses opt for computerized accounting systems to simplify the process and reduce errors. Businesses can choose between different types of computerized accounting systems. 1. Purpose

* A computerized accounting system serves many purposes for the business owner. It improves accuracy, enhances reporting capabilities and simplifies recording. Accuracy increases because math processes occur automatically without human error. The business owner can record each transaction in the computerized accounting system as it happens. This allows the system to pull the necessary information into different reports. The business owner can also create different reports in the system to run on a regular basis. Spreadsheets

* One type of computerized accounting system uses spreadsheets to track each transaction and create financial statements. A business owner familiar with a spreadsheet program can design a variety of worksheets to maintain each account balance and to pull those balances into various reports. This system requires the business owner to invest in spreadsheet software and learn how to use it. Spreadsheet programs provide the additional benefit of using spreadsheets in other areas of the business. Off the Shelf

* Another type of computerized accounting system involves standard software programs sold on store shelves. Several programs exist, such as QuickBooks or Peachtree. These programs provide the framework for business owners to enter financial transactions and run reports. These systems also include options for managing payroll or reconciling accounts. These programs work well for small-business owners who want to focus on their business operation, not the bookkeeping. Custom Designed

* Some companies choose to invest in custom designed computerized accounting systems. These types of systems require the business owner to work with a computer programmer to determine what capabilities she wants from the system along with meeting the requirements of financial accounting. The business owner determines which financial reports he needs to report financial results and which financial reports he wants to manage the business. These systems work well for larger companies with more reporting needs. The Benefits of Computers in Accounting

By Kathy Adams McIntosh, eHow Contributor
Accounting began as a manual process of recording financial transactions into a company's accounting records. Accountants used a 10-column ledger paper and pencil to enter each transaction when it occurred. As computers grew in popularity, companies transferred their accounting practices from paper and pencil to the computer. Computerized accounting provides many benefits to the companies who made this transition. 1. Fewer Errors

* One benefit of computerized accounting considers the higher level of accuracy and fewer errors realized through computerized processing. Each accounting transaction recorded requires the accountant to calculate the numbers to use in the entry recorded in the general journal, to transfer each transaction to the general ledger and to recalculate each account balance. The paper and pencil method increases the potential for the accountant to make a math error, transpose a number or record the transaction in the wrong account. Computers provide the capability of calculating the math, eliminating potential errors, copying the correct numbers from one place to another without transposition and copying the number to the corresponding account number from the general journal to the general ledger. Automation

* Another benefit of computerized accounting involves the ability to automate certain tasks. Accountants create the same reports...
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