INTRODUCTION

The evolution/development of accounting software was through a big process as well as so many

advancements and adjustments. It therefore took time to realize their global application in all

organizations.

These accounting softwares have had big contributions among which there is increased accuracy,

speed of work to mention but two.

After the development of, Internet, E-commerce and technology in general, more and more

developments have been realized in the contemporary world of business. Organizations have

changed the way they do business; methods of employee payments have changed as well as

improvements in the international accounting standards.

This tremendous development has forced organizations to change the way departments do

operate. It is there for important to note that the accounting section has not been left behind as

well.

Originall

y accounting was done manually, but due to its associated disadvantages like tedious work,

constant errors and other related mistakes, the way accounting was done has changed. This has

lead to the development of computerized accounting systems that came with the development of

accounting software that would automatically do most of the work.

However, they are as well associated with some shortcomings as well that have retarded there

efficiency in some organizations among there is the desire for technical knowledge for effective

use especially when it comes to developing countries where technology is just being developed.

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OVERVIEW OF ACCOUNTING

Accounting is a body of principles and conventions as well as an established general process for

capturing financial information related to an entity's resources and their use in meeting the

entity's goals. Accounting is a service function that provides information of value to all operating

units and to other service functions.

Accounting is an Umbrella term encompassing the multitude of disciplines including auditing,

taxation, financial statement analysis, and managerial accounting. Accounting-related functions

include financial accounting, cost accounting, and financial planning.

FIELDS/BRANCHES OF ACCOU NTIN G

The following are the branches of accounting:

Management accounting

According to the Chartered Institute of Management Accountants (CIMA), Management

Accounting is "the process of identification, measurement, accumulation, analysis, preparation,

interpretation and communication of information used by management to plan, evaluate and

control within an entity and to assure appropriate use of and accountability for its resources.

Management accounting also comprises the preparation of financial reports for non-management

groups such as shareholders, creditors, regulatory agencies and tax authorities" (CIMA Official

Terminology).

Financial accounting

The financial accounting is guided by various rules and regulations, some of which are

mandatory. The system cannot normally deviate from the accepted accounting practices.

The object of financial accounting is to provide information mainly to outsiders such as

shareholders, investors, government authorities, financial institutions and so on. The analysis and

interpretation of financial data contained in the income statement and the balance sheet enable

persons interested in the business to make meaningful judgment about the profitability, liquidity

and solvency of the enterprise.

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Cost accounting basically relates to the utilization of resources, such as material, labour,

machines, etc. and provides information like products cost, process cost, service or utility cost,

inventory value among others so as to enable management taking important decisions like fixing

price, choosing products, preparing quotations, releasing or withholding inventory and so on.

Tax accounting is the branch of accounting relating to preparation and filing of tax forms with

government agencies. Tax planning to minimize tax payments is a significant part of the tax

accountant’s work.

Auditing is the branch of accounting involved in reviewing and evaluating documents, records,

and control systems. Auditing may be external or internal.

DEFINITIONS OF KEY TERMS

Computerized Accounting

Computerized accounting is a beneficial use of current technological advances. Not only has it

revolutionized the traditional paper methods of accounting, but it has also created new types of

accounting applications for business. Companies now create entire accounting information

systems that integrate all business operations, including external suppliers and vendors in the

value chain.

Computerized Accounting System

A computerized accounting system is a system used by businesses for recording their financial

information. Many systems are available and companies look for a system to match their needs.

Information System

An information system is any combination of information technology and people's activities that

support operations, management and decision making. In a very broad sense, the

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term information system is frequently used to refer to the interaction between people, processes,

data and technology. In this sense, the term is used to refer not only to the information and

communication technology (ICT) that an organization uses, but also to the way in which people

interact with this technology in support of business processes.

Accounting Information System - AIS

This is the collection, storage and processing of financial and accounting data that is used by

decision makers. An accounting information system is generally a computer-based method for

tracking accounting activity in conjunction with information technology resources. The resulting

statistical reports can be used internally by management or externally by other interested parties.

Accounting Software

This is a Computer programs that assist bookkeepers and accountants in recording and reporting

on a firm's financial transactions. The functionality of accounting software differs from product

to product. Larger firms may choose to implement a customized solution which integrates a vast

amount of data from many different departments. Smaller firms often choose an off the shelf.

HISTORY/OVERVIEW OF ACCOUNTING SOFTWARES

The history of the first computerized accounting system was also implemented in 1953, when

Arthur Anderson Consultancy (now known as Accenture) was asked by General Electric to

implement an automated payroll processing system at their site in Louisville, Kentucky.

The system comprised of a UNIVAC 1 (UNIVersal Automatic Computer-1) computer and

printer. It was the first ever commercial computer system ever implemented and became the first

ever computerized accounting system.

The first computerized spreadsheet appeared in 1961 whilst the first 'off the shelf' accounting

auditing system appeared seven years later in 1968.

The first ever micro-computers started appearing in the mid 1970s. At first these were expensive,

cumbersome and of limited benefit to small or medium-sized businesses. Micro-computers were

perceived as being an expensive hobby toy with limited benefits. Where micro-computers were

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used in business, it was typically used for word processing and word processing systems sold for

around £10,000 per system.

In 1978, two things happened in history. The Intel 8080 processor and the MOS 6502 processor

became available significantly bringing down the cost of micro-computers, Apple launched the

Apple II micro-computer, and the first commercially available off-the-shelf spreadsheet package

was developed: VisiCalc.

TYPES OF ACCOUNTING SOFTWARES

As emphasized by Weaver, Brower and Smiley (1988:520) many software programs are

available to handle the tasks and procedures involved in the accounting subsystems. Some major

types of accounting software and the features and capabilities commonly found in these

programs are described as follows;

General ledger software

The general ledger from Weaver’s point of view is at the heart of every accounting system be it

manual or computerized.

A general ledger program can be used to create and maintain that of accounts and the general

ledger to record and post journal entries and to prepare financial statements.

Because posting is done automatically on a computer, the balances in the ledger are always

current Weaver (1988:521) notes that, a trial balance and financial statements can be generated

instantly without having to do manual calculation.

Many general ledger packages allow a variety of reports to be generated that helps managers

evaluate the financial performance of their businesses. It’s important to note however that, as

with all accounting softwares, the output generated is only accurate as the date that was entered.

Weaver, Brower and Smiley (1988:521) add that, a generate ledger program may be all that is

required by a small business.

However, if a firm has large numbers of general ledger accounts and a wide variety of

transactions, it will need to use subsidiary ledger and special journals.

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In that case, a business may use other programs together with general ledger software.

Accounts receivable software

With this software, Weaver, Brower and Smiley (1988:521) assert that, information about a

company’s credit sales and cash receipts can be recorded and reports involving these transactions

can be generated.

Features of accounts receivable software differ, but most programs allow the user to record

entries involving credit sales and cash receipts, maintain an accounts receivable ledger and

generate a variety of reports.

For instance, a program may produce sales analysis reports showing which customers are buying

particular items or sales returns reports that analyze what items are being returned.

The software may print customer lists and mailing labels, maintain customers’ credit

information, and create as schedule of accounts receivable.

Therefore in this case, because reports can be generated automatically with the software,

management can receive sales and credit information quickly hence being able to analyze and act

on information in a timely manners.

Sales invoicing

If a sales invoicing program is used, it is generally integrated with accounts receivable. The

major task of a sale invoicing program is to generate invoices and statements of account.

Thus when the necessary data is entered a sales invoicing program can automatically computer

with prices and extensions and any sales communication sales taxes shipping charges or

discounts involved in the sale.

Sale on voicing program many prefer other tasks associated with sales such as producing credit

memorandums, maintaining a back –order file, or generate lists of product lines.

Accounts payable software

Weaver (1988:522) and the colleague Brower and Smiley lament that, accounts payable

software handles the activities involved with purchases of supplies and merchandise an account

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and payments for those purchases. Typically accounts payable software allows user to record

transaction involving purchases and payments on account, maintain an accounts payable ledger,

generate cheques for payments and maintain a cheques for register, some systems generate

purchase orders.

Many accounts payable system indicates when invoices must be paid in order to take advantage

of discount periods, and will automatically track discounts earned or lost. And with this feature,

management can easily determine whether it is taking full advantages of discounts.

Inventory software

Weaver (1988: 523) asserts that, inventory software is available that automates many of the

procedures involves in inventory control.

For example, some inventory programs keep track of merchandise items by age which is

important information to a business that stocks merchandise that decreases in value sales times

and provide items-by-items sales analysis.

Many keep track of the minimum number of units of an item that must be kept on hand and show

when items must recorded. Perpetual inventory records can be kept on a computer so that when

physical inventory is recorded the program does an automatic comparison of the figures in the

sales of records.

Some businesses obtain sales or purchase programs that handle some tasks that can be performed

by inventory program, or, a business may have an inventory program that is integrated with its

sales and or purchase program.

For example when a purchase of merchandise is recorded the increase in merchandise

automatically appears in the inventory records, thus when a sales of merchandise is recorded, the

items are subtracted from the records.

Payroll software

It should be kept in mind that. Payroll work required performing a mind range of activities and

involves a great deal of time in recording information, preparing forms, and making calculations.

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Therefore, computerizing a payroll system can be very beneficial to a company since it cuts

down on the time required for payroll work.

Weaver or Salaries based on various plans such as hourly, weekly, salary, commissions or

automatically, as well as federal, state and local tax, deductions and voluntary deductions such as

saving bonds and Union dues. Many payroll program print payroll cheques.

A payroll program many be integrated with the generated ledger system so that the necessary

accounting entire are automatically posted to the general ledger.

ACCOUNTING SOFTWARE COMMONLY USED

Accounting software is a boon for so many modern business organizations. These help

accountants maintain the accounts - whether personal or for our business. However, with so

many options available in the market, it sometimes becomes very difficult to choose the right

accounting software package that will be perfect for the accountant as well as for the individuals.

Hopefully, this review will help you narrow down your choices.

Peachtree

This software comes in different flavors depending on the number of users. Between Peachtree

Pro, Peachtree Complete, Peachtree Premium and Peachtree Quantum buyers can choose from

among several features, depending on what they specifically require. Of these, Peachtree

Premium and Peachtree Quantum also have Accountants’ Editions, which can prove to be of

great use for professional accountants. Added to these are several accounting and business

management tools, reports customized for industry specific needs, and even payroll management

solutions - you have a complete accounting software package that is just right for your pocket as

well.

QuickBooks

A very popular choice of accounting software for personal and professional accounts

management, QuickBooks offers something for everyone. QuickBooks is offered in versions

Simple Start, Pro and Premier. There is also a free version of the software available for download

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from the website, and an online version of the software which you can access via the Internet.

There is also a Premier version specifically for Accountants. Each of the versions offers a

number of features - typically a simple and intuitive interface, access to several reports, payroll

and even tax management.

MYOB

This is another popular choice across the board for individuals, small businesses and

accountants. A cross-platform software package, MYOB offers the versions Premier Accounting

and Business Essentials for Windows users, and Account Edge, First Edge and Checkout for

Mac users. Typically the features include invoicing, banking, contacts management, payroll

management, inventory management, time billing, purchase management, and over 200 different

reports.

Microsoft Accounting Express

Microsoft offers an accounting suite that integrates seamlessly with your other Microsoft

products, while allowing you to manage your accounts, invoices, payrolls and even accept credit

cards. You can also track your billable time, create quotes and invoices and custom create your

reports from 50 available templates.

Net Suite

This is an online accounts management system. There is no software to download and install

because it is web based. The website offers different roles for managing accounts, along with a

variety of reports and tools for managing accounts receivables, accounts payable, payroll and

inventory management along with time billing, costing and banking functions. A good option if

you don’t want to install another software package on your computer and want to be able to

access your accounts via the Internet.

Fresh Books

This is another web-based accounts management system. Fresh books offers several features like

invoicing, time tracking, estimate creation, tracking of expenses, and client and staff tracking

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among others. You can have either a free account with Fresh Books or a paid account depending

on the number of contractors you want to add. FreshBooks also offers branding solutions helping

you create an interface which is in line with your logo and company colors.

Bookkeeper

This is a software package offering a complete suite of accounting features like integration with

banking, expense tracking, payroll management, creating customized invoices, credit card

payment processing, and over 125 custom reports. An additional purchase of Tax Table Updates

enables you to automatically calculate your taxes and deductions.

DacEasy

DacEasy is a fairly good accounting software package which offers the typical features and

sections like accounts receivable, accounts payable, payroll management, inventory tracking,

banking and general ledger entries. A variety of reports from these different sections also allow

you to review and manage your business more effectively.

CYMA

CYMA is also another preferred accounting package. Like several accounting software

packages, this software also offers accounts payable and receivables, payroll management,

banking integration, job costing and general ledger entries. However, it also offers two sections

which are not offered by many other accounting software packages: Purchase Order management

and Systems management. However, this software doesn’t offer features like inventory and time

billing.

NolaPro

A web-based suite of accounts features, NolaPro offers a number of facilities like accounts

payable and receivable, payroll management, order tracking, inventory control, point of sale

management, and an e-commerce shopping cart. NolaPro also has a number of plug-in which

enhance the functionality of the accounts suite.

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STFB

STFB Inc. develops and markets - Integral Accounting Enterprise, a complete accounting & ERP

system with source code and distribution rights. Based on ASP.Net, Visual Basic.Net based

platforms. Integral Accounting Enterprise is perfect for developers, Consultants, Resellers

(VARS) looking for accounting packages to customize and resell to end-users.

STFB includes all the standard features like General ledger, inventory control, AR/AP, ordering,

purchasing, and payroll, help desk, shopping cart, and reports

Pastel Xpress

Any company, large or small, has basic accounting needs. Through the automation of common

business processes, Pastel Xpress accounting software makes the management of these business

accounting needs just as simple! Pastel Xpress is so easy to learn and use, allowing you to

confidently steer your business’ finances. You have the flexibility to add modules to this

financial software, making Pastel Xpress a partner that can increase its functionality in line with

the growth of your business. Pastel Xpress can accommodate up to three.

Tally 9 - Accounting Software

Tally.ERP 9 –the latest evolution of the Tally series—took 3 years and the dedicated efforts of

200 developers to create. It has grown from a basic accounting package into a simple-yet-

sophisticated business management software product. Comprehensive capabilities allow

Tally.ERP 9 to meet the needs of small to large businesses with dispersed operations. And

traditional functions of a business are handled as capably as the more advanced.

The new Tally comes with breakthroughs in collaborative technology that extend a company's

capability of managing information across your software applications, across your offices, with

the business partners and the managers-on-the-move. This leads to better decisions and improved

profits.

Other business programs

The program describes above are designed specifically are other business programs available that

are frequently used by accounting personal. These are as follows;

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Electronic spreadsheet

Weaver (19988:523) lament that a spreadsheet can be thought of as a grid. Columns and rows of

date can be entered in a spreadsheet and set up in the form of a table. What has made the

electronic spreadsheet so popular for business use is its ability to perform large number of

calculations and recalculations. The spreadsheet is able to do this by using formulas that the user

enters into the computer. These formulas show the interrelationships of the numbers and date

enter.

Word processing

Within a word processing program, one can prepare store and pain all types of written material.

A first draft is created and then corrections can be made for typographical errors specifying

frunctration, and style. In addition a new format can be created at the touch of the keys; For

example if a page has narrow margins and is single spiced, spaced and with wider margins.

Thus from the above overview it can be seen that word processing makes writing easier because

text can be edited heavily and surprisingly the final printed copy shows no alterations liquid

correction flied or erasures.

Data bases

Weaver (q988:524) defines data base as a group of records that share something in common for

example, a customer data base is a group of customer records, and a patient data base is a group

of patient records.

Data base software helps businesses manager the information contained in their files or data

bases. After data bases are created, they can easily be revised and pulled out in alphabetic,

numeric, or subject order, or in any other sequence desired.

A data base is used to file records for a business and find them again when they are needed.

It should be noted that there are so many other commercial software programs available today

that most business are able to find packages with the capabilities and features they require.

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DEVELOPMENT/ EVOLUTION OF ACCOUNTING SOFTWARE

Over the course of three decades, SAP has evolved from a small, regional enterprise into a

world-class international company. Today, SAP is the global market leader in collaborative,

inter-enterprise business solutions. The company now employs more than 47 578 people, whose

commitment and innovative spirit pace our future success.

The 1970s: A Real-Time Vision

In 1972, five former IBM employees – Dietmar Hopp, Hans-Werner Hector, Hasso Plattner,

Klaus Tschira, and Claus Wellenreuther – launch a company called Systems Applications and

Products in Data Processing in Mannheim, Germany. Their vision: to develop standard

application software for real-time business processing.

One year later, the first financial accounting software was completed and this formed the basis

for the continuous development of other software components.

The 1980s: Rapid Growth

SAP moves into the company's first building on Max-Planck-Strasse in an industrial park in

Walldorf, near Heidelberg. Our software development area and its 50 terminals are all now under

one roof. Fifty of the 100 largest German industrial firms are already SAP customers.

The SAP R/2 system attains the high level of stability of the previous generation of programs.

Keeping in mind its multinational customers, SAP designs SAP R/2 to handle different

languages and currencies. With this and other innovations in SAP R/2, SAP sees rapid growth.

By the middle of the decade, SAP founds its first sales organization outside Germany, in Austria.

The company makes its first appearance at the CeBIT computer fair in Hanover, Germany.

Revenues reach DM 100 million (around $52 million), earlier than expected.

In August 1988, SAP GmbH becomes SAP AG. Starting on November 4, 1.2 million shares are

listed on the Frankfurt and Stuttgart stock exchanges.

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Germany's renowned business journal, manager magazine, names SAP its Company of the Year

– a distinction we would receive twice more in the next few years.

With the founding of subsidiaries in Denmark, Sweden, Italy, and the United States, SAP's

international expansion takes a leap forward.

The 1990s: A New Approach to Software and Solutions

SAP R/3 is unleashed on the market. The client-server concept, uniform appearance of graphical

interfaces, consistent use of relational databases, and the ability to run on computers from

different vendors meets with overwhelming approval.

A growing number of subsidiaries are managed out of Walldorf. The new Sales and

Development Center in Walldorf officially opens it doors. It symbolizes the global success of the

company. In our twentieth year, our business outside Germany exceeds 50 percent of total sales

for the first time.

By 1996, the company has earned 1,089 new SAP R/3 customers. At the end of the year, SAP

R/3 has been installed in more than 9,000 systems worldwide.

SAP celebrates its twenty-fifth anniversary in 1997 and now employs approximately 12,900

people. We continue to strengthen our industry focus and build more and more industry-specific

solutions. Henning Kagermann becomes Co-Chairman and CEO of SAP AG with Hasso

Plattner. On August 3, 1998, the letters S-A-P appear for the first time on the Big Board at the

New York Stock Exchange (NYSE), the largest stock exchange in the world.

As the decade draws to a close, Hasso Plattner, Co-Founder, Co-Chairman, and CEO announces

the mySAP.com strategy, heralding the beginning of a new direction for the company and our

product portfolio. MySAP.com links e-commerce solutions to existing ERP applications, using

state-of-the-art Web technology.

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The 2000s: Innovation for the New Millennium

With the Internet, the user becomes the focus of software applications. SAP develops SAP

Workplace and paves the way for the idea of an enterprise portal and role-specific access to

information.

Currently, more than 12 million users work each day with SAP solutions. There are now 140,000

installations worldwide, More than 2,400 certified partners, over 25 industry-specific business

solutions, and more than 75,000 customers in 120 countries. SAP is the world's third-largest

independent software vendor.

With service-oriented architecture and the underlying integration and application platform SAP

Net Weaver, SAP is providing our customers with solutions for end-to-end business processes.

With SAP Net Weaver, your company can integrate people, information, and processes within

the company and beyond.

To further demonstrate our commitment for ongoing innovation, growth, and market leadership,

SAP acquired Business Objects in 2008. Together, SAP and Business Objects, an SAP company,

offers the industry's most comprehensive portfolio of business performance and optimization

solutions for companies of all sizes.

STEPS IN USING ACCOUNTING SOFTWARE

Accounting packages are available to make accounting much easier. However, people who have

always used manual accounting might be doubtful of transitioning from manual accounting to

computer software. Once we discover how helpful computer software can be in keeping track of

accounting, we are likely to wonder how we ever lived without the accounting computer

software. Here is how to transition from manual accounting to computer software.

a) Recognizing the value of handling your accounting through accounting computer software;

Computer software can run reports significantly faster than a person can run manual reports.

Computer software makes it much easier and faster to reconcile accounts. Computer software

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can also help us set up and track a business budget. If we want to know where every dollar is

going, it is much easier to find out by using computer software.

b) Exploring available options; Quicken is one of the most popular accounting computer

software programs. Other options, such as Microsoft Money, are also available. It is there the

role of the systems manager to know each computer software package, what if offers, and

decide which one sounds like it will best meet the requirement accounting needs.

c) Trying the software before you buy it; many software companies make their accounting

computer software available to try for free for a period of time. Take these companies up on

their offers. Go to their websites and download the trial software. This gives the user the

opportunity to compare and contrast accounting computer software packages as well as to see

the difference between using the computer software versus doing your accounting manually.

d) Transferring the accounting data for one account, such as a checking account, to the

accounting computer software; For 1 month, get in the habit of recording your deposits and

checks in the computer as well as your manual accounting system. Be sure to use the

computer software to reconcile your checkbook. For many people, simply seeing how easy it

is to reconcile a checkbook through accounting computer software sells the software.

e) Using the features available for that account; when one writes a check, he/she use the

accounting computer software to record what he is spending his money on. At the end of the

month, he runs a report to view the cash flow over the past month. Once he has a month’s

worth of data on the computer, he can take advantage of many of the financial reports that the

software has available.

f) Transition the rest of your accounting data over to the computer software once you are sold

on the value of the accounting computer software. Once you do this, you can run a variety of

reports that will help you feel much more on top of how you are spending your money.

g) Back up your financial data regularly. One big fear that many people have in transitioning

from manual accounting to computer software is of losing all of their financial data. Be sure

to back up your accounting computer software data onto a disc on a regular basis so you have

that data available if your computer crashes.

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ADVANTAGES OF USING ACCOUNTING SOFTWARES

Facilitates Auditing activities

Many organizations are using accounting softwares to process transactions and design those

systems so that service documents are retrievable in readable form and can be traced so easily

through the accounting system to output. In these instances, many of the traditional service

documents such as customer purchase order shipping and receiving records, and sales.

The related accounting software’s such as QuickBooks, Pastel and tally also product printed

journals and ledgers that allow the auditor to face individual transaction though the accounting

records.

Facilitates the organizational attainment of competitive advantage

Within the context of information explosion and pressures of the information age more and more

organizations are finding themselves investing heavily in computerizing that accounting system.

This because they do in order to cope with the volume of required accounting information and

the reduction of time within which the information is required.

This is unquestionable more acute in profit making organizations compared to service

organizations.

In this regard accounting softwares therefore help the organization to reap major advantages. For

instance with computerized accounting information systems and organization plan better carry

out monitoring and control activities move effectively can communicate across time space and

organizational hierarchy through the development and proper use different accounting

information and communication systems.

Thus, from the above explanation, computerized accounting is relevant in the management of the

modern organization.

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Supporting management decisions

It is understood that accounting softwares facilitate management’s decision making process. It is

well known that in all businesses management responsibilities entail making a variety of

business decisions.

Thus computerized accounting provides reports and other information useful in making these

decisions. This is so in that formal computerized financial statements provide variety useful

information which the managers need.

In achieving all these, a computerized accounting system will always be timely and flexible.

By being timely to computerized accounting information system can supply information on with

sufficient lead time hence permitting management to assimilate and use it in the decision at hand.

On the other hand by because of its flexibility a computerized accounting information system can

provide information to support new decisions without needing major modifications.

All these therefore can provide an immediate solution to the problem of delays in reports in

accuracy among other inefficiency which enhances making decisions.

Accounting softwares/Computerized accounting can do much to reduce labour and to

enhance the value of the information an accounting system generates.

It is obvious that by changing the way both operations and accounting objectives are

accomplished computers charge the control environment and the way control objectives can be

accomplished. This also leaves the senior staff time fixed up to allow focus on planning.

For example, since computers are more accurate and faster at authentic than humans most

calculations can be incorporated into application programs. This therefore eliminates the need for

employees to verify each other’s calculators the accounting department.

Speed and accuracy

In this case, it is clear that accounting softwares work very fast and thus can obey without of

constructions per second. This can be observed in their accuracy more over most of the mistakes

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that occur in a computerized accounting information systems are human errors which could have

resulted from people breeding say; computers with wrong data or his fractions.

This therefore, implies that computerized accounting information system can play a big role in

fastening transactions in the accounts section hence increasing efficiency in the department’s

transactions and the whole organization at large.

Reduces Embezzlement

Computerized accounting software makes it difficult for employees to steal money from the

company. For example, if a payroll employee tries to pay herself more than the allowed amount,

her theft will most likely be discovered because the accounting system stores all saved

transactions

Diligence

It is absolutely necessary to note that a computers unlike human to note are diligent or reliable in

the sense that, they never get tired or more because of lengthy repetitive or monotonous tasks.

For example, if a computer is given the task of calculating the payments made a thousand clients

or salaries for thousand employees, it will compute the amount of money for each of the clients

or employees with the same speed and accuracy.

Storage capacity

Furthermore, weaver (1988:823) I am….that unlike the human brain or any storage space a

computer’s memory can store vast amounts of accounting and other information or data more

over on a small device such as diskette or hard disk.

Therefore, because computers can store large amounts of information in relatively small place, it

means apparently that computerizing the accounting system can help the accounts department

and the company at large to reduce the amount of papers in offices which would otherwise bring

congestion. Even, weaver points out that, this excessive amount of papers would also put time

offices at a higher risk of five. Besides, a computerized system also makes records easily

accessible even to authorized staffs of the company.

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From the above, it can be observed that computerizing the accounting system can help the

company particularly the accounts department in bringing its offices nearer to the much desired

status of paperless electronic officers.

Versatility and automation

Accounting softwares being versatile they can perform any tasks provided that these tasks can be

broken down into steps (algorithus) that computers can follow. This is where computers when

used can work as calculators, records keepers, do graphics and even perform other financial tasks

in other financial tasks.

In simple words, with computerized accounting, the accountants can manipulate figures

numerical figures, do data base management among others depending on different needs of the

department.

On other hand, it should be noted that, computerized systems are so automatic in that once given

a set of data and relevant instructions, they can process information with minimum use intentions

in his case, it is apparent that this property of automatically of computerized accounting

information system is what distinguishes it from manual accounting systems.

Reduced labor

Accounting software reduces labor by also performing automatic, preparing documents, creating

transaction files, and recording and posting transactions while, employees input only the

minimum data to process transaction, in this, it is apparent that the computer period efficiency of

a computerized accounting system makes it forcible to integrate accounting records cost –

effectively say, from the sales and cash receipts cycle and the purchase and cash disbursements

cycle thus therefore provides management with greater access to useful information on a timely

basis. Through all this, the accounts department and the company a large can perform to the

stake holder’s expectations.

Facilitates control on confidential information.

When the accounting system is computerized, the control emphasis slots away from separating

employee duties and performance many verifications of manual accuracy and is placed on

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ensuring the proper functioning of application programs, using security procedures to limit

access to the computer systems application programs and files to authorized employees,

verifying the accuracy of input and reconciling outputs to inputs. This entire safe guards the

company’s information whose leakage would make competitors or hackers to take advantage of

the company particularly the accuracy.

Improved productivity and creativity

When the accounting system is computerized, employees’ personal productivity is improved

because tedious time consuming and repetitive tasks are reduced or eliminated. This can improve

the quality of end users work and allows them to perform more complex tasks.

In other words on effective and efficient computerized accounting system frees the workers for

more creative thought oriented activities and for planning and control activities. This enables

them to make better, faster and more accurate decisions.

From the above, it is apparent that with a computerized accounting information system

employees’ skills are improved hence resulting into better performance of the department and the

organization at large. This is because working in a computerized environment the computer

literacy of uses hence allowing them to make better use of current technological advancements.

Ease of use

In this case, when an accounting system is computerized, it may become so easy for employees

to use it and perform tasks everywhere and at all times. Thus, it is obvious that most

computerized softwares are easy to understand and use. In this case, users (employees in the

accounts department) can change the information they produce or modify their application

anytime their requirements change. And with portable computers (laptops) some of the work can

be competed at home, on a plane or almost anywhere else. All this results into better execution of

the accounting and other tasks expected of the department and organization at large hence

gaining a competitive advantage.

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Easy illustration of various changes in the accounts

With computerized accounting system, a simple work sheet can be used to illustrate the various

changes in the accounts. This worksheet called “spread sheet” can be used in accounting to

perform financial calculations and record transactions. In other words the accounting clerks can

use computers to show the effects of business transactions on the basic accounting equation

quickly and accurately.

Thus if the computerized accounting system is programmed properly all accounts can determine

the accounts affected, the amounts involved and whether the accounts are being increased or

decreased. Once such data are entered, the computer will automatically calculate the new

accounts balances and determine whether the accounting equation is balance. From the avocet it

can be seen that when accounting system is computerized verifying the transactions become

easy.

Reduced audit costs and time spent before releasing an audit report.

With accounting softwares, aviators can reduce their costs significantly. These savings result

from sing word processing and spread sheets to document their work and to revise the

documentation when changes occur improved risk analysis better planning and control of the

audit better report content and presentation and enhanced creditability.

At first, it used to take auditors hours with manual accounting systems to prepare and foot

manual trial balances post adjustments and prepare financial statements and if additional

adjustments or changes are made for the case of manual accounting information system the

whole process has to be repeated.

While with a computerized accounting system an auditor can easily input the working trial

balance handle all types of adjustment and reclassification entries and automatically computer

the adjusted trial balance. It can also facilitate completion of financial statements and their fool

notes and tax return information.

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OBSTACLES/CHALLENGES OR LIMITATIONS TO ACCOUTNING SOFTWARES IN

MODERN ORGANIZATIONS

Wide variety of applications

One of the reasons that computerized accounting system was slow to take hold, and is still

difficult to implement successfully in some organizations is that, it supports a wide variety of

applications. These range from structured tasks to unstructured ones

Besides, the range is so wide that it is almost too simplistic to include these applications under

the title of computerized accounting information system” this is quite a different with transaction

systems such as payroll and inventory processing oriented toward specific well defined methods

and procedures.

Another reason that computerized accounting system shows to take hold is that, user support for

this technology is diffused in most organizations. For instance on accounting department is likely

to include hardware and software obtained from several different vendors and the kinds of

support for these different prices of equipment and software may vary. Seldom will the support a

user feels is necessarily be available.

In addition, a direct consequence of this multivendor environment is that the equipment or

software may be incompatible especially in the accounts department who want to share hardware

software or documents may find that sharing is impossible.

Lack of help options for the use

Contributing to problems with computerizing the accounting system is the fact that it is often

unclear where the end user should go in the organization for help some support may come from

the central data processing group and other support may be available from a special

computerized accounting support staff but in most organizations there are always fellow

employees who develop into self made experts and are quick to off advice.

For the above reasons among others most organizations find that they lack consistent policies

regarding computerizing the accounting information system. This explains why in most cases,

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the hardware and software available to end users (accountants) may be underutilized why

incompatibility problems occur and why many become frustrated and angry with computers.

High risk of failure and inconsistencies

Some companies computerize their accounting systems to obtain a strategic advantage over their

competitors through providing improved financial services that would be impossible without the

use of computer technology.

However, using such computerized accounting systems does not guarantee such benefits as some

applications fail. In this case, it should be noted that, some accounting application programs can

be improperly programmed or improperly run, and input data can be erroneous. In such cases,

computers given the wrong input data make mistakes and can facilitate fraud at the same

incredible speed at which they perform useful tasks this therefore implies that computerizing the

accounting system may become more of a liability than an asset in the accounting department.

High costs

Because of high costs involved in purchasing, main training and designing the software there is

always a lack of long-term funding to support computers.

Furthermore, computerized accounting information systems are expensive in that, although the

cost of computer equipments has dropped dramatically over the years, most organization are now

designing larger and more ambitious computerized accounting systems and their cost can run

into mutinous amount of money

In addition, once a computer system is purchased the costs will have just begun in this case, large

professional staffs are often required to keep the system running and maintained and to develop

new applications.

Moreover, in time the hardware will become absolute and the imprecations that are used to run

the computerized accounting system may need to be changed frequently to meet the organization

changing needs. All the above circumstances serve to drain the financial resources as the benefits

of the system is superseded by the costs.

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Limited privacy of the computerized accounting information

Employees in the accounts with computerized system may erroneously believe the accounting

information and other confidential documents are safe and private only to be surprised when this

information ends up in places or with people they did not intend it to go to.

All this is true in cases where there are no effective controls to the system and for case where

there are hackers. All this leads to easy accessory to the company’s financial information and this

can be used to out compete or even defraud the whole organization at large.

Thus, in such cases, computerizing the accounting system does not mean a solution to a mess in

the accounts department.

Limited skills among workers

Computerized accounting system may not be relevant in the accounts department especially

given the limited skills people may be having as far as computers are concerned. In this, where

there is lack of the house information system skills, data presentation and impropriation workers

accounts and managers may find it impossible to easily excite tasks using the computerized

accounting system. This leads to efficiencies in producing the information needed hence

affecting the decision making process.

Logic and development errors

Because the workers or accountants may have little experience in system development and use,

they are likely to make errors and less likely to recognize when they have occurred, the

development may solve a wrong problem poorly define system requirements, application of

analytical remodel use the wrong software or incomplete or outdate information in developing

the accounting system.

Usually, these errors may be caused by incorrectly using formulas or software commands.

All the above may lead to inconsistent case in the performance of the accounts department and

the company at large.

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Duplication of systems and data and wasted resources

If the end users of the computerized accounting system are unaware that other users or

competitors are aware, similar information needs duplicate systems are most likely to occur.

Experienced users may also take one more than they are above to accomplish and so they are

likely to end up wasting time and resources. This implies that computerizing the accounting

system may become more of a liability than an asset to the department and organization as a

whole.

Dysfunctional behaviour

Some users of the computerized accounting system may go overboard in developing end user

systems and the result is a variety of dysfunctional behaviours in other words accounts may

develop a computerized system to enhance their power, position or reputation rather them

effecting the company’s financial tasks. They may develop such a system “just in case” they

need it.

Therefore, they may get to the point of “analysis proteolysis” in which they analyze data to death

and are still unable to make a decision. In other words such people may only develop an

accounting system to slant things toward a position they may to support.

CONCLUSION

In a nutshell, accounting softwares have had big contributions among which there is increased

accuracy, speed of work to mention but two. However to a greater extent computerized

accounting system/accounting softwares is associated with many challenges/problems because it

is the people in the accounts department who do the accounts. Besides accounting software is

associated with some shortcomings that have retarded the efficiency in some organizations

among there is the desire for technical knowledge for effective use especially when it comes to

developing countries where technology is just being developed.

Thus, if the organization has people who do not know what do and they are using accounting

softwares, the errors will be worse than ever before.

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REFERENCES

Roman S. (1996) Information Technology for Development Volume 7,

IOS Press Tokyo

Marshall B. Romney, Paul J. Steinhart and Barry E. (1973), Accounting Information System,

7th edition Cushing, Addison-Wesley. New York

Donald J. Guerrieri, Barry Haber and William B. Hoyt (1993), Accounting, 3rd edition

Glencoe, USA

Robert G. Mary James Jiambalvo and Charles L. McDonald (1995) Accounting. 1st edition,

Library of congress Cataloging-in-Publishing Data USA

David H. Weaver, Edward B. Braver and James M. Smiley (1988) Accounting Systems and

Procedures 5th edition, Library of Congress Cataloging-in-Publication Data, USA

Internet: www.pcmrp.com

www. daceasy.isasi.com

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