Benefits of Using Computerized Accounting

Computerized spreadsheets and accounting software, generally known as computerized accounting information systems, are widely used in all industries for financial reporting and analysis. Spreadsheets are utilized by linking data through formulas and functions, then performing basic or complex arithmetic operations to produce reports, charts and graphs.

Accuracy

Accounting software can perform the same functions as a calculator, including advanced math equations, lessening the risk of human error in calculations and accounting ledgers. Accounting programs are able to compute large, complex and time-consuming financial analysis of data with more precision then traditional accounting methods. Spreadsheets are able to automatically enter a second account ledger when a user manually enters the first one, negating the need for double-entry account ledgers.

Decision Making

Computerized data allows executives and businesses to make financial decisions more quickly as data collection time and methods are improved and fewer reports are required. Additionally, it is simple to quickly redraft new spreadsheets examining the effects of different decisions on a business' finances.

Favorable Cost/Benefit Relationship

The cost of the computerized software and training for employees is less than the cost of additional employees previously required to produce, check and redraft financial documents and accounting ledgers. The time previously spent on simply entering the data can be put toward better use, like double checking accounting software to make sure there is no glitch or errors in equations. While computers are faster, more accurate and simple to use, they still can produce errors if data is entered incorrectly. The amount of time and money devoted to this is far less as it only needs to be done on the original spreadsheet and subsequent updates or revisions can be made by manipulating the portion of the data that needs to be changed while the rest remains intact.Sources:

• Yale: How Computers Have Simplified Accounting
• Walden U: Why Switch to Computerized Accounting?
• Saint Leo Chapter 6: Accounting Information Systems