Current accounting software used nowadays
Discuss about the Antecedents and Switching Cost on Accounting.
Accounting is one of the basic requirements in any business firm or organizations. The accounting helps to keep records of financial condition of the business. The accounting in business requires much time and labor in preparing the financial statements. The expertise hands are also required for the proper maintenance of financial information (Ramazani, Askari and Fazli 2014). There are also many business firms that help to maintain the accounts of other business firms. The firms also maintain their records individually. The use of computer in the present days has facilitated the process of accounting to a great extent. There is much software that like Xero that ease the process of accounting. One can easily maintain all the accounting records with the help of this software (Khaneja 2015). There is also no need of any specialized expert of accounting to maintain these accounts. The financial statements like the profit and loss account, balance sheet and others can be obtained at any point of time. The financial statement of the company will help one to know about the current situation of the business of the company. In general, the balance sheet statement, profit and loss statement and others are obtained at the end of the financial year. However, with the help of this accounting software, the financial statement could be obtained at any point of time in the year (Ramazani, Allahyari and Ganbari 2014).
The process of accounting refers to keeping records of financial accounts in the business organizations. The process has been in practice from very early stages. In the previous years, the accounts were mostly kept in hands. The hand written documents were used to be kept which contained records of all financial reports (Gögüs and Özer 2014). In the present days, various software is being used to keep records in accounting. The accounting software has eased the process of accounting to a great extent. The accounting software that is widely used nowadays is MYOB, SAB, Xero and others.
In the early days, most of the accounting company could use hand based accounting systems. There has been a switching of accounting software after the introduction of the GST. The Government has provided many subsidies for the introduction of this software. The Common wealth nations have almost incurred the cost of using all this software. The Government also wanted many of the small businesses to get computerized. This would have helped the companies to keep a better record of their business. The use of accounting software facilitated the accounting of the business firms (Antonelli et al. 2014).
Importance of accounting software
The small business does not keep a track of all kinds of financial transactions happening in their business. The information about cash flow, profit and loss account, daily profit margins and others needs to be properly maintained for any kind of business. In order to keep all this information, there is a need of well versed book keeper or an accountant. This would incur an extra cost to the business firm. However, with the help of the accounting software, the small business can keep a track of all this accountant information at a time. The software prepares the BAS report that is to be submitted to the Government. The BAS report needs to be submitted to the Government at a regular interval. With the help of the BAS report, the Government is able to know about the financial statement of the company. The amount of tax that needs to be paid by the company is also calculated with the help of this report. The big business firms are able to maintain his records. However it takes a lot of time and money for the small firms to maintain the records (Yeboah, Owusu Kwateng and Oppong 2014).
The small accounting firm often employs part time accountant to keep their financial and economic records. The proper maintenance of the financial records is very important. The error in financial reports will give incorrect idea about the financial condition of the business. The idea about income tax depends on these financial records. Therefore, misleading financial records will incur great loss to the company (Dandago and Ormin 2013).
There are a lot of pros and cons for the use of accounting software. The paper system has a lot disadvantages. The pen and paper system is easy and cheap. The software system is much cheaper than the ordinary software systems. There is also lesser risk of technical errors in pen and paper method. Some of the accounting software has trial version for use by the people. The pen and paper method of accounting however does not scale the business volume. The main disadvantage of pen and paper method is that all the data entry an accounting stuff is done by hand. As a result, as time increases, the process becomes bulky. The software method however has advantages for all this factors. The software manages the accounts in a proper way. All the data records are kept in the accounting software. The balance sheet, trial balance, profit and loss, cash flow statements can be obtained as and when required. The pen and paper method can prepare these statements only at the end of the financial year (Relhan 2013).
Pros and cons of accounting software
In the case of the small business, the information about purchase, sales and amounts spends are being kept by the owner of the business only. They do not employ specialized assistant for this purpose. If the owner of the business do not know accounting, then it would be very hard for them to keep a track of everything. The books of book keeping can act as a mirror that would give the information about the condition of the business (McManus 2013).
The major accounting software that are being used currently are MYOB, Money Work express, Quick books online plus, Reckon one, Sage and others. The MYOB software is a cloud based accounting software that helps to keep account records. The software is designed to keep records of the business and save time in accounting. The software has been awarded the “most innovative large company” act for its use. The tax and income statements, GST, BAS statements and other features are included in the software. The Xero is also one of the important software for accounting. In the software one has to just make an entry of the book keeping. The online software can track the payments of the company, prepare monthly statements, can prepare bank feeds and manage purchase orders at the same time (Van Akkeren, Buckby and MacKenzie 2013). The software has the capability to work with a number of accounts. The online software however needs to be purchased at one time. The software is compatible with any version of windows and other operating systems. The languages of the software are readily understandable by a layman. There are also a number of pre entries of the transactions in the account. There is free trial version of the software that is obtainable. The free trial version of the software has certain advantages. The major entry is already available in the software in the free trial version. Therefore, if one wants to use the software, the trial version would enable one to know about the features of the software from the beginning. This would also help the people to learn about the accounting process (Hardy 2014).
The small and medium sized enterprises could not afford a lot of money to purchase some better version of accounting software. The software like MYOB is cheap enough for these companies to afford. The spreadsheets and the use of this software have really facilitated the accounting process. The major advantages in accounting after the introduction of accounting software are:
Major accounting software used currently
This has led to the saving of time and labor in accounting process.
The accuracy of operation could be achieved with the help of use of accounting software.
The printout of the sales records is obtainable at any point of time.
The ledger accounts are automatically updated with the help of accounting software.
Stock records are updated and verified automatically with the help of this software.
The automatic information about the valuation of stock, payroll analysis, VST analysis, stock analysis and others are obtainable with the help of these software.
The use of accounting software has greatly facilitated the business of these days. The use of accounting software like Xero, MYOB and others has greatly facilitated the accounting process. The process of keeping accounts is practiced from the age old traditions. In the early days, the accounts were mostly hand written. This would employ much time and labor for the accounting process. The invention of computer in the present days has greatly enhanced the life in all fields (Hopper and Bui 2016). The computer has greatly facilitated the system of accounting. The use of accounting software has made the process of accounting easy. The software enables one to keep a record of the transactions. The computation of this software is also much accurate as compared to the calculations made by pen and paper. In a single word, the accounting software has greatly benefitted the process of accounting.
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Yeboah, E., Owusu Kwateng, K., and Oppong, C. 2014. Information Systems and Accounting Practices in Ghanaian Public Institutions. Accounting & Taxation, 6(1), 121-132.
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