Advantages of a Computerised Accounting System

Building on the features and the manual-versus-computerised comparison already studied, a Computerised Accounting System offers a business several concrete advantages:

1. Speed. Once vouchers are entered, ledgers, trial balance and final accounts are generated almost instantly, instead of taking days as under a manual system.
2. Accuracy. The chances of casting, posting and carry-forward errors are minimised because the software performs these mechanical steps itself, consistently, every time.
3. Reliability of information. Because processing follows a fixed, tested set of rules built into the software, the resulting reports can be relied upon for decision-making by owners, managers, banks and other users.
4. Real-time, up-to-date reports. Managers can check the current cash position, stock position or a customer's outstanding balance at any time, not merely at the end of a period.
5. Quality and variety of information. The same basic data can be presented in many useful forms — party-wise outstanding statements, stock summaries, group-wise expense analyses — without any extra manual compilation.
6. Reduction in paperwork and storage cost. Years of accounting records can be stored on electronic media occupying very little physical space compared to bound manual ledgers.
7. Economical over time. Although the initial cost of hardware, software and training is higher than a purely manual system, the running cost per transaction falls as volume grows, since additional transactions do not need additional clerical staff in the same proportion.
8. Legibility. Printed reports are always clear and legible, unlike handwritten entries that may be difficult to read or interpret.
9. Automatic backup facility. Data can be duplicated (backed up) easily, protecting the business against the loss that a fire, flood or physical damage would cause to paper-based manual records. …