Published: 29 March 2020
E-accounting, also commonly known as online accounting, is a new and upcoming advancement in the field of accounting. According to Ginwigmore accounting service, Unlike traditional accounting, e-accounting uses online and computer technology to help accountants accurately record and store accounts effectively. This makes the accountant’s job faster and easier, thereby leading to more productivity.
Accounting records and source documents exist in digital form instead of paper and are stored in safe and secure environments such as online server databases. This helps ensure that the financial data of companies and businesses are not compromised. Authorized users have access to this data regardless of what platform they use or where they are in the world.
What are the Features of E-Accounting?
E-accounting systems can help speed up the process of accounting for businesses through these features:
- Universal Access – Authorized personnel have convenient access to the system wherever they are and whatever platform they are using.
- Cheap and Efficient – E-accounting can efficiently offer its services to a large number of customers while being affordable.
- Boosts Productivity – Due to advancements in computer technology in recent years, e-accounting can make an accountant’s job easier and boost his productivity.
- Constant Improvements – Due to it being fairly new, it has the potential for more improvements and updates by the service provider.
- No Administration for End-Users – Users of e-accounting services don’t need to go through the hassles of administrating systems.
Now that we’ve highlighted the features of e-accounting, it’s time to talk about its advantages which are as follows:
- Speed – Due to technological advances, using e-accounting is faster, easier, and more convenient. You can do your work anytime, anywhere.
- Low Cost – Small and medium-sized businesses can purchase e-accounting systems at a low price.
- Real-time monitoring – The managers and accountants of these businesses can monitor their company’s financial position in real-time. This can make their work of adjusting the company’s strategy easier and more effective.
- Instant Reports – Computerized systems can also quickly provide accurate reports on payrolls, stock evaluation, profit and loss, and customer accounts.
- Less Risk of Human Error – Transactions are only needed to be inputted once, unlike traditional accounting systems which require two or more inputs. With enough training, anyone in a company can do the inputs. This can lessen human-induced errors in accounting.
- Faster Data Entry – E-accounting systems can make collating and printing of documents such as payrolls and purchase orders quick and accurate. This also allows improved inventory management and payment collection, thus saving plenty of time and improving cash flow.
- Automatic Updates – Computerized accounting systems update their records automatically. This means all account records will be up to date and will save more time updating manually.
Even though there are plenty of advantages to using a computerized accounting system, it is without its disadvantages. Here are some of them:
- Lost Data – It is possible to lose data because of software or hardware damage.
- Computer Errors – Even though computers are very efficient, they are far from perfect and may produce errors only noticed by a human.
- Viruses – The system can be compromised and data can be lost due to hackers, viruses, etc.
- Change in data – Data can be changed or lost due to computer fraud.
E-accounting is a great and powerful development in the field of accounting, it has a lot of advantages that improve the productivity and profits of businesses. However, it also has its faults, but it can be mitigated by practicing proper security measures.
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