In earlier days, accounting and book keeping consisted of thick binders, colour coded files, pencils and battery operated calculators. But since information technology has been adapted into accounting and book keeping, tremendous change has been brought into this line of work.
Changes such as the following have occurred:
- The accounting document has changed from hard copies to soft copies throughout the years.
- Equipment such as computers, laptops, CDs, pendrives, printers, scanners and fax are being used
- Data is entered , recorded are maintained on computers.
- Accounting software like erp 9 which make accounting simple and also help keep records of due dates and payments have developed.
- Spreadsheets are also used for the purpose of accounting
- Accounting software are really useful to detect errors of commission and omission, though it still cannot detect errors of principles.
- Even taxes are paid and returns are filed online. In fact for certain companies it is compulsory to make only online payment of taxes.
- Security is also enhanced due to introduction of digital signature which is used while submitting any returns online.
- The documents are also kept more securely as they are encrypted and then stored in soft copies.
Nowadays it is really important to be tech savvy to be an accountant as it requires constant use of information technology in the field of accounting.
Since drastic changes have been made in accounting, due to information technology, following advantages are noted:
- Saves Time: Time is saved as only voucher entry is required to be made and the financial statements get prepared on their own
- Saves Space: Earlier, hundreds of cabinets were required to store accounting information, which now hardly takes up any space as they are saved in soft copies
- Detects Errors: Accounting softwares detect errors of commission and errors of omission but not errors of basic principles of accounting
- Easy Access: Accounting data can be easily accessed through the organisational servers
- Secure: Book keeping is more secure as data is encrypted and is less likely to be stolen or destroyed
- Easy filing of returns: Returns are easily filed online in a format prescribed by the board of taxes
- Easy Payment of taxes: Taxes can be easily paid online. Some persons even get days of grace if they opt for online mode of payment
- Easy preparation of financial statements: Financial statements like trading account, profit and loss account and balance sheet are automatically formed. Balance sheet for any day can also be viewed.
- Use of accounting ratios: Accounting ratios are also automatically calculated which can further be used for cost and financial management
- Lesser chances of manipulation of data: Data cannot be easily manipulated as it is entered through a software and therefore is more trusted by stakeholders
All in all, accounting today owes everything to information technology, otherwise people would still be scratching their head to search the single error that they made through thick ledgers and lose receipts.
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