Computerized accounting

computerized accounting

What Is Computerized Accounting?

Computerized accounting is a system of accounting in which the accounts of the company are maintained on a computer using an accounting software as opposed to the manual system of accounting in which the accounts are maintained on books of paper. In the computerized accounting system, entire accounting process is done on the computer using accounting software and nothing is done on paper. Now-a-days most of the companies in the world,whether big or small, use computerized accounting system instead of manual accounting system.

Advantages Of Computerized Accounting:-

Less Time:-

Accounting under Computerized accounting system takes much less time than accounting under manual accounting system. In most of the accounting software, only ledger accounts need to be created and transaction entries are required to be passed. Trial balance and financial statements such as profit and loss account and balance sheet are automatically generated by the accounting software.


Computerized accounting is more accurate than manual accounting. In manual accounting there are more chances of making errors and mistakes as everything is done by hand.

Instant Reports:-

Various kinds of reports and accounting information can be instantly generated with the click of few buttons using the accounting software which helps the management in taking quick decisions.


The accounting information can be kept secure and safe under computerized accounting system by using a password which prevents unauthorized people from accessing the accounting information. In manual accounting system there are chances of accounting books being stolen, lost, damaged or accessed by unauthorized people.

Less Paperwork:-

As everything is done on computers, there is very less paperwork involved in computerized accounting as opposed to manual accounting where everything is done on paper books.

Less Employee Cost:-

In computerized accounting system less amount of employees are required to do the same amount of accounting work as manual accounting which reduces the salary and other employee costs of the company.

Less Space:-

Under Computerized accounting system lesser office space is required because of reduction in paper work and accounting staff.

Disadvantages Of Computerized Accounting:-

Cost Of Software:-

There is the initial cost of purchasing and installing the accounting software. Then there are annual maintenance charges for using the software and also cost of upgrading the software to latest version which many small companies cannot afford.


The accounting staff needs to be given training to use the accounting software which takes time and involves some costs. This is especially true in case of custom accounting software. The training time and cost can be reduced to great extent by using widely used standard software available in the market and hiring people who know how to use that particular software.

Computer Or Software Crash:-

Sometimes the computer or the accounting software may crash which wastes time as no accounting work can be performed till the computer or accounting software is restored.

Accounting Software:-

Following are some of the popular accounting software which are used by the companies:-


SAP stands for systems,Applications, products in data processing. SAP is a German software company. Large companies use the FICO module of SAP ERP software or the newer SAP S/4HANA software and small companies use SAP Business One software for accounting.


Tally ERP accounting software is created by Tally Solutions Pvt Ltd which is an Indian company. Tally ERP software is mostly used by small and medium-sized companies.


QuickBooks accounting software is created by Intuit which is an American company. QuickBooks is mostly used by small and medium-sized sized companies.

In addition to above there are many other accounting software packages that are available in the market and used by the companies. Some companies also get custom accounting software developed according to their needs instead of using the standard ready-made accounting software which is available in the market.












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