The traditional system and structure of accounting is labour oriented and manual procedure of storing the data’s at a storage space that is only devoted for the accounting purpose in a business entity. This is keeping of the books of accounts of the enterprise that is investment of both work and time. These information’s that are maintained by the company is very sensitive data’s for the business and its stakeholder’s. Cloud based accounting is an employment of the space of storage facility for the information’s that are higly price sensitive for the business for storing the accounting information’s in an organized manner. This provides a greatest facility of securing the data’s of the company that are related to accounts. This are optimum level of facility that avails the to be seen and observed by the key personels of the company that are the stakeholder’s whom are authorized by the management to see the data’s on real time like Board Member, accountants, etc. This are the sensitive and classified data’s that are not open to public but the authorized persons can access it with the assistance of the service of internet from any point of time and from anyplace in the globe. This sincerely reduces the cost that is spend on the keeping of books in the company. This also assists in the correction of the error’s that may have caused due to clerical errors in the company as per the appropriate procedure of authorization for correcting of accounting errors. These are kept stored in a safe place in a remote distant from the source is securely maintained for giving an optimum level of service to the clients. Therefore, it is assessed that traditional accounting structure is less effective as compared to the cloud oriented accounting because investment of resources and time are both employed for completing the task of accounting of the company. As this is seen that traditional way of bookkeeping is outdated procedure of maintaining of accounts.
An entity of business like Goodie Gumdrops has its very own devoted hard drive just for the purpose of keeping of the books in the company that is related to the accounts. This does not provide a facility of access to the data’s that easily accessible by the authorized persons of the business entity. Cloud based accounting system is a process of keeping of books for the company in a modern method that are very secure and cost effective system that are monetary data’s of the business enterprise. The access is provided on a twenty four hour basis to only the persons in key role in the company. The data’s that are saved and kept in the business entity can seen from any place in the globe that is linked to accounting. This form of accounting has a suitable system that is good for the new company’s in the market that have a small budget for the cause of accounts of the business enterprise.
Benefits of cloud based accounting is: information’s are simply accessed from anywhere at any point of time. Drawbacks of cloud based accounting: unsecured and unsafe of the accounting data’s that may be at risk of theft of the data’s. Benefit’s of traditional accounting system is: very simple to structure that can be implemented. Drawbacks of traditional accounting are: very old process of accounting that may have manipulation of information is possible.
As per the assessing the financial structure and management of the company it can be stated that the company like Goodie Gumdrops has an option that is beneficial and realistic structure of keeping of books of accounts of the business entity. Traditional accounting is not at all profitable for the Goodie Gumdrops as it is labour-based that is also requires lot of time for completion. The company such as these does not have that much money for spending in accounts department. This is the optimum option that must be selected.
Financial reports for Goodie Gumdrops
Assumptions:
The assumptions used for the financial transactions are:
- Purchase price $1 per unit;
- Selling price $1.50 per unit;
- Operening bank balance is Nil.
- The date missing is 3rdAugust 2017;
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