Information on Accounting and Information Technology

Accounting makes full use of information technology.

Accounting and information technology go hand in hand, with accounting applications being very popular with many businesses. It is rare to see any business using pencil and paper to process accounting anymore. Computerized accounting is the standard nowadays.

Speed

Computerized accounting is where information technology and accounting met, resulting in great improvements in processing accounting data. Computerized accounting applications speed up accounting tasks to new levels never imagined in the manual days. Efficiency was increased tremendously. If you want a report, all you have to do is to press a button and you get it. That would never have happened in manual system.

Accuracy

When accounting tasks are computerized, they are likely to be accurate because many systems perform calculations easily and automatically. A spreadsheet, for instance, can add up a column of 500 numbers with a simple formula. It's quick, easy and accurate. There is no need to run calculator tapes to prove that the number is correct. Many systems allow for "copy and paste", eliminating typing mistakes.

Backup

A major benefit of matching accounting with information systems is the ease to store and make backups. If something happens, data can be restored easily. Many times backup tapes or on other media is kept away from the premises so that if a fire or other disaster strikes, there is a back up file some place else. Safety of data is a major plus in computerized accounting.

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Types

Information systems have many popular accounting applications, Some examples are:

1) Spreadsheets -- matrix-like tables that perform fast calculations, an accountant's favorite.

2) Integrated systems -- accounting systems that seamlessly run general ledger and modules such as accounts receivable, accounts payable, fixed assets and inventoy. This system can also have sales and payroll modules. All information transfer into general ledger without human intervention.

3) Tax preparation programs -- popular with tax accountants.

Considerations

There are some items to consider about accounting and information systems.

-- Beware of costs associated with an accounting program, such as software costs, maintenance and training.

--Don't forget security issues related to information systems, where viruses can create havoc and systems can go down. Someone could steal your data or delete transactions in your computer. Protect yourself against these threats.

-- Consider using the "cloud" to process accounting information. The "cloud" means that data is processed and stored in another place, not in your computer. Applications can "live in the cloud", meaning that they are not kept on your computer or server.

Resources

• Moneyinstructor.com: What is an Accounting System
• Dssresources.com: Brief History of Spreadsheets