Impact of ICT in Accounting

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Impact of ICT in Accounting

Advantages

  • Saves time and money by automating the accounts.
  • More accuracy
  • Only need to post into the accounts once as it will automatically post the second account for you. E.g if you debit the bank with the detail vehicles it will automatically post on the credit side of the vehicles account with the detail bank with the same amount.
  • Can be connected to a Payroll processing procedure so that payments are made automatically.
  • Accounts are balanced off automatically.
  • Information is automatically transferred into the final accounts so no need to collect the right information.
  • These can all be backed up and be password protected.
  • ICT will make it easier for the owner to assess the business at a  point of time as accounts will automatically be ready, making it quicker for them to make costly decisions.
  • Not as many staff need to be paid for the same amount of work done.
  • The business will have increased their reputation by using the computer systems making them seem more up to date and reliable.
  • New job opportunities for employees.
  • Managers have less staff to manage and may give them a larger department/s to be managed.
  • Employees get to learn new software making them more employable.

Disadvantages

  • High cost of setting up the computer systems.
  • Purchase of accounting software.
  • Cost to train staff in this software.
  • Inefficiently while staff are adjusting to the new system.
  • Can cause technical faults so a technical support team will have to be hired if no already in the business. Will have to go through the recruitment process to find these.
  • Staff morale may be effected.
  • Security issues may occur and data could be lost or put in the wrong hands. Can cause fraud.
  • Data back ups will have to be done regularly so that all information is safe and secure.
  • Some staff may become redundant and will no longer be needed, so the owner will have to pay their redundancy.
  • Staff may need to be paid a higher wage because they are more productive than before with the assistance of the ICT system.
  • When faults occur they may stunt work and productivity of staff and the business.

Evaluation

Each business will have their own preference of how they produce their accounting information. In the long run using ICT systems will improve the profits of the business as it will improve productivity. They will have to pay for ICT professionals but they can also be used in other parts of the business for general ICT use.

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