How computerization helps the business?
Computerized accounting: Accounting software uses computer and software packages to record, store and analyze financial data. Even though most companies use accounting packages at present, it is essential to know the underlying principle of accounting is necessary before starting to use the accounting packages.
A computerized accounting system brings many advantages when compared to a manual system. The well-known packages are Quick books, Sage, and many more.
The advantages of using computerized systems are the following;
Automation
Since the software handles all the calculations eliminate many time-consuming processes. E.g., when an invoice is issued, it is automatically making accounting less time-consuming,
Accuracy
Once you enter the data, the system will do all the calculations to the tiniest detail.
Data Access
Individuals can access the data securely from anywhere if they have a laptop and the internet.
Reliability
The computer packages’ work is so accurate that anyone can rely on financial statements to make financial decisions.
Scalability
When the business grows, the accounting work increases and becomes more complex. With computerizing, everything becomes more accessible and sustains accuracy, too, compared to looking through a pile of papers.
Speed
When using accounting software makes the work easy and much faster. Besides accounting statements and any report is much quicker.
Security
It can store the data in offsite locations, so any damages like floods, fires, and fraudsters trying to get information and damage the contents can always recover from offsite storage places. E.g., many use Dropbox to store their content for safety reasons.
Cost-effective
Computerized accounting is much faster, so it helps save time; time is money, so you can use that time in other production work to make more money. Besides, it helps the owner to implement more internal control in the business.
Visuals
You can view your accounts in different formats, such as graphs and charts, which might help people understand better, especially those who do not have accounting knowledge.
A business has many activities, and you must spend money on the purchase or rent of premises, wages, electricity, raw materials, equipment, stationery, etc., to conduct a business.
That means every transaction generates a financial transaction that must record daily. It takes many hours with the manual system; therefore, it is ideal for implementing the computerization of the accounts. Also, you need a bookkeeping system, so many small businesses use the single-entry system that builds up information to build up the double-entry system.