response in 5 sentences or more.
Hi Professor and Class,
Key advantages of automating a manual accounting system:
The two key advantages are speed and accuracy, additional advantages are:
1. ease of producing end of the year reports
2. instant access to accounting information
3. easy document production
4. staff motivation
6. ability for taxes to be computed automatically
Disadvantages of automating a manual accounting system:
1. inconsistency in data-entry, room for errors, mis-keying information
2. ongoing staff training expense
3. reduction in sharing information and customer services
4. time consuming and costly to produce reports
5. duplication of data entry
The most important steps in the conversion process are:
1. Finalizing data in the manual system, after the system is loaded onto the computer, the owner needs to finalize all of the data contained in the manual system. The owner have to ensure that all the transactions appearing in the accounting records and that all calculations are correct. The owner have the option to hire an accounting firm to audit the manual financial records.
2. Transferring balances to the new system: the final account numbers in the the manual systems, the owner can the transferred the ending balance to the new system. Each account has to be set up, by entering an account name, the type of account and the beginning balance. Once each balance has been entered, the owner need to compare the balances to the manual system balances to ensure that all data has been eneterded in the system correctly and accurately.
Accounting is a necessary function for all business. Although, in business there is always a balance of cost vs. benefit. As the business grow, the benefit of the functions of an automated system increases. A new system can be a benefit if there is a good manual operating system to upgrade from.