6.

8..
8. Computerizing your Books (Rightsizing to your need)

Wednesday, May 31, 2017 - 9:30am - 11:30am

In the computerizing session we will take a look at the factors you might want
to consider in moving to a computerized accounting system or upgrading to a
more sophisticated one.
Computerized Accounting
 Accounting Systems
• A necessary function in any business
• Manual accounting system require posting
business transactions to
many ledgers and journals
• Computerized accounting
systems allow the user to
enter a transaction into the program once

3
 Advantages & Disadvantages
Advantages
• Save Money
• Save Time

Disadvantages
• Data loss (power failures, viruses, hackers)
• Computer fraud
• Careless data entry

4
 Advantages in more detail
• Automation
• Accuracy
• Data Access
• Reliability
• Scalable
• Speed
• Security
• Cost-effective
• Visuals
5
 Session Summary
Computerized Accounting:
• Helps Reduce Errors
• Helps Pros Work At A
Quicker Pace
• Can Be Easily Customized
• Offers Secure and
Accessible Data Storage
• Helps Reduce Expenses

6
 Conclusion (Slide ½)
• Managing your business should not be taken
lightly
– Good bookkeeping leads to good decisions
– Bad bookkeeping can cause major oversights
• Accounting software will make it easy for you
– Paper ledgers and excel spreadsheets will not help
• Software is simple to use and accessible from
anywhere

7
 Conclusion (slide 2/2)
If you move in this direction, consider these
factors
• Ease of use
• Integrate with other tools
• Connects to your bank
• Protects your data
• Customer Support
• Price

8
Advantages & Disadvantages of
Computerized Accounting
by Lisa Magloff

Accounting is a crucial function for every business – large or small. There are two types of
accounting systems, manual and computerized. Where accounting functions were once performed
by hand by trained professionals, today there is a wealth of accounting software available to help
anyone keep the necessary accounting records. Whether you chose to use an accountant to perform
accounting manually or use a computerized system depends upon your specific accounting needs.

Advantages That Can Save Money

Computerized accounting systems offer several advantages for small businesses. Systems for small
and medium sized businesses can be purchased off the shelf at low cost. These programs allow
managers to see the company's financial position in "real-time" and make adjustments to the
business strategy as needed. Computerized systems can also provide instant reports on stock
evaluation, profit and loss, customer accounts and payroll and sales analysis, again, allowing faster
adjustments in your business strategy. In addition, transactions need to be input only once, and,
with some training, anyone in the company can handle the inputting.

Advantages That Can Save Time

Using a computerized accounting system can save you time. Accounting software allows faster data
entry than manual accounting, and allows documents such as invoices, purchase orders and payroll
to be collated and printed quickly and accurately. Because of its efficiency and ease of use,
computerized accounting systems also allow you to improve inventory control and payment
collection, saving time and improving cash flow. Because computerized systems update some
records automatically, your account records will always be up to date, saving time in updating.

Disadvantages

Using a computerized accounting system comes with its own set of problems, such as the need to
protect against data loss through power failure or viruses, and the danger of hackers stealing data.
Computer fraud is also a concern, and you need to instigate a system of controls for who has access
to the information, particularly customer information. If there is a security breach and data is
stolen, management can be held personally liable for the loss of data. You also need to make sure
that the data has been correctly entered into the system, as a mistake in data entry can throw off a
whole set of data.

Source (with thanks to Lisa): http://smallbusiness.chron.com/advantages-disadvantages-

computerized-accounting-4911.html

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Differences between Manual &
Computerized Accounting Systems

by Sheila Shanker (excerpt)

The accounting principles and concepts are the same, with

differences lying in the mechanics of the process.

Speed
The main difference between manual and computerized systems is speed. Accounting
software processes data and creates reports much faster than manual systems. Calculations
are done automatically in software programs, minimizing errors and increasing efficiency.
Once data is input, you can create reports literally by pressing a button in a computerized
system.

Cost
Another difference between manual and computerized systems is cost. Manual accounting
with paper and pencil is much cheaper than a computerized system, which requires a
machine and software. Other expenses associated with accounting software include
training and program maintenance. Expenses can add up fast with costs for printers, paper,
ink and other supplies.

Backup
A third difference between manual and computerized systems is the ease of backup of a
computerized system. All transactions can be saved and backed up, in case of fire or other
mishap. You cannot do this with paper records, unless you make copies of all pages--a long
and inefficient process.

Source (with thanks): http://smallbusiness.chron.com/differences-between-manual-

computerized-accounting-systems-3764.html

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6 Factors to Consider When Selecting Accounting
Software for Your Small Business (Firmology)
Managing the books for your small business is not a task you should take lightly. Good
bookkeeping leads to good financial decisions. Bad bookkeeping can cause major oversights that
can cost you your business. That’s why it’s so important that you use accounting software that
makes it easy for you to see your business’s strengths and weaknesses. A written-out ledger or
Excel spreadsheet just doesn’t cut it anymore.

Only a few years ago, accounting applications lived on the desktop of the small business owner or
their accountant’s computer. The books were not accessible from another location and only one
person could view them at a time. Then cloud computing took off and small business accounting
software providers caught on.

Today, financial information can be securely accessed anywhere, anytime, from any computer or
mobile device. There are a number of options on the market and it can be overwhelming choosing
the best one for you. However, the factors outlined below apply to the majority of small business
owners and should be considered when shopping for an online accounting program.

1. Ease of use

User-friendly online accounting software presents you with a straightforward dashboard that
provides a snapshot of your company’s financial health immediately upon logging in. The
dashboard even highlights your key accounts so you can quickly gain insight into how your
business is performing.

You should then be able to drill into the dashboard and perform basic accounting functions with
only a few clicks. There is no need to spend valuable time customizing an invoice for a specific client
or to get caught off-guard by a suddenly-due bill. Your software should simplify your bookkeeping
so you can quickly perform essential tasks.

2. Integrates with other tools

Every business is unique and uses a plethora of tools to keep things running smoothly. It’s likely
that you use different applications to manage your various business operations (perhaps an e-
commerce platform, a CRM system, or job tracking). Seek out accounting software that integrates
with your other business management applications.

Also, keep in mind that as your business succeeds and grows you may adopt other tools to handle
the increased workload. In general, the more flexible your software is the better.

3. Connects to your bank

Perhaps even more important than integrating with your CRM or job tracking platform is having
the ability to connect your books with your bank. In the old days, you would have to manually enter
bank transactions into your desktop software, but the cloud-based applications of today does this
for you. Bank, credit card, and PayPal statements can be fed directly into your accounting software.

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All you have to do is match and reconcile bank transactions against accounting transactions. This
process is much more accurate and efficient than the old-fashioned method.

4. Protects your data

When your financial data is stored in the cloud, there is no longer the possibility of vital information
being lost in the event of a hard drive crash, power surge, or coffee spill. The data is backed up on
external servers for you. Backup frequency varies among providers, so be sure to factor it into your
decision.

With cloud-based software comes the threat of your data falling victim to malicious activity. Online
banking has set a standard for security, so make sure your software meets or exceeds this standard.
That means Secure Socket Layer (SSL) encryption, multi-layered firewall server protection, and
routine external audits and inspection.

5. Customer Support

The ability to connect with an employee, other users, and experts is essential when learning any
new software. The answer to your question will not always be in the manual or on the resources
section of a website.

Software providers with large customer bases often have online communities, made up of users
interacting with each other. These communities are normally monitored by employees, who chime
in on discussions when necessary.

If you really want to become a bookkeeping master, you can opt for software that offers extensive
training, such as video tutorials and webinars.

6. Price

Free options do exist but they come with a price, usually in terms of the number of features
available. Subscribing to a SaaS accounting provider for a monthly fee is a good fit for most small
businesses. These companies often offer a free trial, which is a great way to determine the best
option for your small business.

Using the factors outlined, you should be able to find an accounting application that fits the specific
needs of your business and makes your regular accounting tasks simple and accessible. Hopefully,
your selection will give you great insight into your company’s financial situation and empower you
to make sound, profitable business decisions.

Thanks to our source: http://firmology.com/2013/07/03/6-factors-to-consider-when-selecting-

accounting-software-for-your-small-business/

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The Advantages of Using Computerised
Accounting Software
By Gary Hadler
Let me start this article by saying I am a qualified accountant who has taught accounting at a
variety of levels for over 18 years. I have also worked extensively as a business consultant for
small and medium size enterprises. I am continually amazed when I come across a business
either not using a computerized accounting package or using spread sheets to do their
accounts. Therefore I decided to write a short article on the benefits of using a computerized
accounting package. The package I use for our small to medium business is MYOB (Mind Your
Own Business) accounting software.

Small and medium sized businesses can now buy ‘off the shelf’ accounting programs at
remarkably low cost. Larger businesses will often have customized programs made for their
business. The accounting programs carry out functions such as invoicing, dealing with
payments, paying wages and providing regular accounting reports such as trading and profit
and loss accounts and balance sheets.

The introduction of computerized accounting systems provide major

advantages such as speed and accuracy of operation, and, perhaps
most importantly, the ability to see the real-time state of the company’s
financial position. In my experience I have never seen a business that
has upgraded to a computerized accounting system return to paper
based accounting systems. A typical computerized accounting package
will offer a number of different facilities. These include:

- On-screen input and printout of sales invoices

- Automatic updating of customer accounts in the sales ledger
- Recording of suppliers’ invoices
- Automatic updating of suppliers' accounts in the purchases ledger Recording of bank receipts
- Making payments to suppliers and for expenses
- Automatic updating of the general ledger
- Automatic adjustment of stock records
- Integration of a business database with the accounting program
- Automatic calculation of payroll and associated entries

Computerized accounting programs can provide instant reports for management, for example:

- Aged debtors’ summary – a summary of customer accounts showing overdue amounts

- Trial balance, trading and profit and loss account and balance sheet
- Stock valuation

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- Sales analysis
- Budget analysis and variance analysis
- GST/VAT returns
- Payroll analysis

When using a computerized accounting system the on computer, input screens have been
designed for ease of use. The main advantage is that each transaction needs only to be
inputted once, unlike a manual double entry system where two or three entries are required.
The computerized ledger system is fully integrated. This means that when a business
transaction is inputted on the computer it is recorded in a number of different accounting records
at the same time.

The main advantages of a computerized accounting system are listed below:

Speed – data entry onto the computer with its formatted screens and built-in databases of
customers and supplier details and stock records can be carried out far more quickly than any
manual processing.

Automatic document production – fast and accurate invoices, credit notes, purchase orders,
printing statements and payroll documents are all done automatically.

Accuracy – there is less room for errors as only one accounting entry is needed for each
transaction rather than two (or three) for a manual system.

Up-to-date information – the accounting records are automatically updated and so account
balances (e.g. customer accounts) will always be up-to-date.

Availability of information – the data is instantly available and can be made available to
different users in different locations at the same time.

Management information – reports can be produced which will help management monitor and
control the business, for example the aged debtors analysis will show which customer accounts
are overdue, trial balance, trading and profit and loss account and balance sheet.

GST/VAT return – the automatic creation of figures for the regular GST/VAT returns.

Legibility – the onscreen and printed data should always be legible and so will avoid errors
caused by poor figures.

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Efficiency – better use is made of resources and time; cash flow should improve through better
debt collection and inventory control.

Staff motivation – the system will require staff to be trained to use new skills, which can make
them feel more motivated. Further to this with many ‘off-the-shelf’ packages like MYOB the
training can be outsourced and thus making a particular staff member less critical of business
operations.

Cost savings – computerized accounting programs reduce staff time doing accounts and
reduce audit expenses as records are neat, up-to-date and accurate.

Reduce frustration – management can be on top of their accounts and thus reduce stress
levels associated with what is not known.

The ability to deal in multiple currencies easily – many computerized accounting packages
now allow a business to trade in multiple currencies with ease. Problems associated with
exchange rate changes are minimized.

In summary if you have not computerized your accounting you should seriously consider doing
so. I chose to train in MYOB after reviewing all the small to medium business accounting
packages on the market. In my view MYOB was the best overall package. A free 90 day trial
version of MYOB accounting software can be downloaded from your own country’s MYOB
website. This trial version is the full version but any business set up with it can only have
entries entered for 90 days; after that, purchase of the software is required. I strongly
recommend you download a version and take a look.

About the author – Gary Hadler B.Ec, Dip.Ed, MBA is a qualified accountant and a registered
teacher in Hong Kong and Australia. Gary has taught accounting and computerized accounting
software for over 18 years.

Thank you to our source:

http://www.itseducation.asia/computerized-accounting.htm

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