The impact of computers in accounting
The impact of computers in accounting
In our society today, computer technology plays an important role in many form of business, especially in the field of accounting. As technology advances, not only does the use of computers penetrates individual's everyday life, it also helps to mange and improve many business operations from service, manufacturing to retail.
Ken, an accounting graduate, works as an accounting clerk at Advance Manage, a service operation located in Markham, Ontario. The small business is in the form of a partnership, and has only 5 employees. Advance management mainly provides service for property owners who are seeking proper management for their housing estate such as small plazas and condominiums. Since Ken is aware of the important of the computer skills in the job market, he devotes many time self-studying his PC at home. With his expertise in bookkeeping and his adequate knowledge of computers, he finds that computerized accounting is easy to work with and is very timesaving.
With computer technology changing at such fast pace, many businesses try to keep up by upgrading computer system constantly in order to stay competitive. In the example of Advance Management; the computer equipment they have is quite advances. For example, they own 3 computers of which one is solely for accounting purposes. The system includes a CPU Pentium II with 300 MHz microprocessor, a 64 MB SD Ram on board, a 56 K modem, a 32�CD-ROM, and also a 4.3 GB Hard Disk. This high quality equipment has bought recently and they have already contributed a lot in improving the business' operation by making better works done more quickly.
Advance management also has its own great software to match with its advances computer system. The software is specifically designs for the use of property managing and is called AFEX. This accounting software for property management has been in uses for almost a year and is a very helpful in working with the company's accounting routine. The company uses the accounting software to a great extent. All Account Receivables, Account Payables, payrolls and financial statements are done conveniently on the computer. For Account Receivable, by entering all information (ex. Account number, name, addresses, rental payments, and lease term) into the database, an account receivable ledges is formed. As each center's pay his/her rent monthly, the amount is automatically debited into the individual's rent receivable account. The spreadsheet form of software shows updated amount outstanding, amount and date paid, and time remaining on lease term of each renter accurately.
For the account payable, information on the vendor's must be input into the system for the creation of the Account Payable ledges. Upon receipt of invoices or statements, Ken, the accounting clerk, credits the amount into individual vendor's account. When making payments, cheques are printed up and the system computes the correct balance of cash and Account Payable accounts. The program also allows the monthly payroll schedule to be calculate accurately. Just by having all employees' info like name, working hours, wages etc enter into the database. So, payroll can be done with the guide of the program.
This special software has many advantages. According to Ken Wong, the system is good for its specialty in the field of managerial accounting. He uses this program mainly because it's easy to use and it's effective and efficient in organizing and calculating rental income and maintenance expense. The multi-function of the advance system is also an important factor for the company to use the software.
Although the system has many useful functions and advantages, there is still need for improvement. For instant, Ken is not completely satisfies with the level of manual work involves with the accounting procedures. He suggests a higher degree of automatic money transferring, possibly having the centers and vendor paying and receiving payments through computerized banking system. This might save Ken's time having to organize and transferring cheques. Also, a system that can organize and identify other maintenance charges is also useful since these charges make up most of the expenses for the company. In the hopes of making all these improvement on the computer system, the company plans to upgrade the system step-by-step, by spending more resources on the technology is to create new ways to save time and manpower.
When we speaks of how is Ken's company avoids the Y2K problems, he says his company didn't do any thing to avoid it. Since their company is a very small business, they can't spend too money to avoid the Y2K problems on the computer and they think it will not be a big problem. Before the year 2000, many forecaster tell us the big changes and problems in the computer industry such as the "thousand year bug" possibly over-growth of computer technology or "will computer control mankind". Fortunately, all these problems didn't happen in Ken's company on the year 2000.
Although Advance Management is a small business, it makes efficient use of the advance technology and has ambition to discover more. Computers have great impact on the profession of accounting. With the rapid growth of technology today, there's no doubt that computer will become a common asset in all professions.