In this report I will be discussing both the advantages and disadvantages of using computer accounting packages. Beginning with the advantages, computer accounting packages are truly time efficient. They enable a quicker way of collecting and reporting financial accounting data, as vast volumes of transactions can be dealt with within a short amount of time. Reasons being as accounting packages allow rapid entry of accounts. (See information: Magloff, 2013). This means that multitasking is even more simpler, therefore a variety of vast business targets and tasks may be met ahead of the set date. Due to this, there will be less of a stressed working environment as there is less time pressure. Resulting in happy employees and a rise in productivity.
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Employees should carry the skills to use accounting packages in order for tasks and calculations to be carried out correctly. If you do not carry the skills to use the accounting software’s, (see information: Sethy, 2015). it is more likely for information to be imputed incorrectly without knowing. Therefore, calculation figures will be completely wrong. This altogether sabotages the financial reports. It will require time and will be costly for the business as they have to ensure that the employees are trained to use these accounting …show more content…
computer breakdown, computer fraud and failure of training employees on how to us the accounting software’s. Ultimately, all these factors have the same negative effects on the business, the owner and the shareholders. Due to the factors listed above, accounting information will not be able to be accessed or will be inaccurate. This will have an effect on reporting inaccurate information to shareholders e.g. investor, lenders and the business owner. Investors would be effected negatively as they would not be able to determine how competent the business is and if they hold good profitability. With inaccurate financial information, investors may take a major risk and invest into the business who have poor profitability and is not very competent. Though they would not have known this because the financial reports may have displayed good financial performance by the company when really this is not the case. This would leave the investors in a large amount of loss. Lenders would also be disappointment as with the incorrect financial reports shown to them, it may seem as if the business holds good liquidity and solvency when it actual case it does not. This would mean that it is less likely the business to pay back its lenders what it owes, again a huge loss for the lenders. Lastly, the owners would be effected by the inaccurate information when making
Employees should carry the skills to use accounting packages in order for tasks and calculations to be carried out correctly. If you do not carry the skills to use the accounting software’s, (see information: Sethy, 2015). it is more likely for information to be imputed incorrectly without knowing. Therefore, calculation figures will be completely wrong. This altogether sabotages the financial reports. It will require time and will be costly for the business as they have to ensure that the employees are trained to use these accounting …show more content…
computer breakdown, computer fraud and failure of training employees on how to us the accounting software’s. Ultimately, all these factors have the same negative effects on the business, the owner and the shareholders. Due to the factors listed above, accounting information will not be able to be accessed or will be inaccurate. This will have an effect on reporting inaccurate information to shareholders e.g. investor, lenders and the business owner. Investors would be effected negatively as they would not be able to determine how competent the business is and if they hold good profitability. With inaccurate financial information, investors may take a major risk and invest into the business who have poor profitability and is not very competent. Though they would not have known this because the financial reports may have displayed good financial performance by the company when really this is not the case. This would leave the investors in a large amount of loss. Lenders would also be disappointment as with the incorrect financial reports shown to them, it may seem as if the business holds good liquidity and solvency when it actual case it does not. This would mean that it is less likely the business to pay back its lenders what it owes, again a huge loss for the lenders. Lastly, the owners would be effected by the inaccurate information when making