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Advantages of having an Accounting System

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Every company needs an accounting system to manage their resources efficiently and effectively.

So what is accounting system?

An accounting system is a system of collecting, storing and processing financial and accounting data that are used by decision makers. It is an organised set of both manually and computerised accounting method for tracking and presenting accurate and timely accounting activities in conjunction.

Advantages

  • Accuracy

People make errors, and a computerised accounting system is designed to minimise the errors of humans. For example, when we key in addition of one too many zeros can drastically alter the accuracy of the financial report. Computerised accounting systems can reduce calculation errors, simplify the data entry process and accurately account the required information such as profit and loss, balance sheet, general ledger and even tax.

  • Automation and productivity

A computerised accounting system eliminates cumbersome and increases the productivity of the company. It is less time consuming as of manual processes. In addition to calculations being automated, many accounting software programs allow various reports, such as year-end and statistical, to be generated at the touch of a button. Most of the time, automation is more reliable and have better task performance. For instance, a document that once took me hours to compile can now be created in a matter of seconds. An additional benefit to automating the accounting process is the ability to expediently share information. Information regarding business accounts can be independently entered into an automated system by multiple authorised parties.

  • Compatibility

The implementation of a computerised accounting system also allows various businesses to more easily share financial information. For example, if your company with manual accounting procedures purchases another organisation with manual accounting procedures, it may take weeks or even months to completely integrate the financial data of the two firms. On the other hand, if both companies utilise compatible computerised accounting systems, all data can easily be integrated because one program is able to speak to the other

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