The Role of Computers in Financial Accounting

From my reading of Literature everywhere it suggests that the computer has simplified financial accounting and embracing computers have helped tradition financial reporting. Role of computers in financial accounting and accounting software packages.

Accounting software packages can help a business with usual everyday financial accounting tasks such as sales, invoicing and receipts, purchases and payments, banking and cash management, VAT, tax and accounts, stock control and payroll. According to Jayden Mathews, financial accounting software conducts programmed business and accounting transactions. In most finance departments utilize accounting applications, such as QuickBooks, STFB, SAP Business One are used to perform financial transactions and to manage a company’s income and expenditure. These types of programs are used to help keep track of financial operations and conduct complex transactions effortlessly without consuming a lot of time and labor that would otherwise be used in case of manual transactions. Spreadsheet software also is known as “what if” queries influences the way firms, individuals input and organize financial data.

The use of spreadsheet programs is much faster, more accurate, and easier to use than traditional accounting techniques. They are used to run usual financial tasks, such as compiling financial data, presenting the data in an organized manner through the use of charts and graphs, drawing budgets and calculating transactions. Also used for keeping track of sales, expenses and inventory records, and for budgeting and forecasting future sales and expenses. Computer spreadsheets have become the most important of all software tools for modern financial accounting and reporting. A strength of the use of computers in financial accounting is considered the reduction in the number of accounting personnel which Accountants needed to process transactions in their repetitive accounting work could be run through by computers in batches.

The efficiency and reliability of computerized accounting that improves the efficiency of financial reports preparation and the accuracy of accounting data. The role of computers in the present day and modern day financial accounting In modern days, the right accounting software is available and has significantly changed traditional financial accounting. In the past, traditional financial accounting was found to be unmanageable and difficult to use as accountants would have to use the manual method of keeping and maintaining records. With the introduction of computers in financial accounting, the manual method of accounting is being replaced gradually.

Finally, the database technology has completely changed the financial accounting departments. Before the use of personal computers, firms and businesses were limited to manual methods for keeping track of financial data. According to Tavakolian (1995), the manual accounting systems consisted of paper ledgers, typewriters, and calculators. But many errors could be committed and data usually goes undetected with this system. Nowadays, the use of computers in the financial accounting system is able to run and manage financial data efficiently. Also in present years, there was a lack of suitable off-the-shelf accounting software packages, However, in recent years, software companies have been developing financial accounting software packages and currently there are over 100 accounting software packages.