Computerized accounting systems (CAM) are softwar:

programs that are stored on a company's computer, networ

server, or remotely accessed via the Internet.
Computerized accounting systems allow you to set up incom:in
salaries b
and expense accounts, such as rental or sales income,
expenses, and material costs. They also can be used t
advertising
 Advantages of Computerized Accounting:
) Better Quality Work: The
accounts prepared with the use of
computers are usually uniform, neat, accurate, and more
legible than manual job.
2) Lower Operating Costs:
Computer is a labor and time saving
devise. Hence, the volume of job handled with the help of
computersresults in economy and lower operating costs.
6) Improved Efficiency: Computer brings speed and
accuracy
in preparing the records and accounts and thus, increases the
efficiency of employees.
9 Facilitates Better Control: From the
management point of
view, greater control is possible and more information may
be available with the use of computer in accounting. It
ensures efficient performance in accounting work.
110 Vipul'yM|IT in Accountancy -I| (Be
(5) Greater Accuracy: Computerized accounting ensure
accuracy in accounting records and statements. It preveñ
clerical errors and omissions.
(6) Relieve Monotony: Computerized accounting reduces th
monotony of doing repetitive accounting jobs, which an
tiresome and time consuming.
(7) Facilitates Standardization:
Computerized accounting
facilitates standardization of accounting routines and
procedures. Therefore, standardization in accounting
ensured.
(8) Minimizing Mathematical Errors: While doing mathematis
with computers, errors are virtually eliminated unless the
data is entered improperly in the first instance.
(9) Automation: Since all the
software, calculations are handled by the
computerized
accounting eliminates many of the
mundane and time-consuming
manual accounting. For example,processes associated with
once issued, inyoices are
processed automatically making accounting less
consuming. time
Disadvantages of Computerized Accounting:
(1) Reduction of Manpower: The
The
accounting work reduces the
organization. Thus, it leads to
introductionof
computers
number employees
of
in
in an
in
greater amount ofo
unemployment.
(2) High Cost: Asmall firm cannot install
becat
A
Computerized Accounting System
115
Difference between Manual
accounting: accounting and Computerized
Point of
Manual Accounting
Difference
Meaning In Manual accounting,
Computerized Accounting
we keep In
of journalphysical register accounting, Computerized
and ledger We use
for computer and different
keeping the records of each
transaction. accounting
digital software for
record of each
Calculation transaction
In manual accounting, In
all calculation of computerized
and subtracting are addingaccounting,our duty is to
For example,donerecord
the transactions
manually) we
find the balance of any manually in the database.
All the
ledger account. We will done by calculations are
calculate the debit and computer system.
credit side and then we
a will find its difference for
|showingbalance.
Recording Recording of financial
transactions is
Data content of
through transactions is storedthese
in
books of original entry. well-designed data base.
1Classification Transactions recorded
in the books of original
No such data
duplications
entry are further classified order
are
made. In
to produce ledger
by posting them into accounts the stored
ledger accounts. This transaction data is
2
results in transaction data processed to appear as
duplicity. classified so that same is
presented in the form of
report.
edger In manual accounting, Computerized
mounts we check the journal and| accounting system will
then we transfer figures to automatically process the
related accounts' debit or system and will make all
credit side through manual the accounts ledgers
posting. because we have pass the
vOucher entries under its
respected ledger account.
 Viput'sMTin Accountancy- iR
116
are
The generation
Transactions ledger accounts is
Sumariing produce
Summarized to ecessary conditio
balance by trial balance.
trial balances of
ascertaining the
various accounts
Adjusting entries are There is nothing
Adjusting adhere to the making adjusting erit
entries made to for errorsS
principleofmatching rectifications.
of Our Cornputeria
In this system
Trial Balance accounting systern
accounting we have to produce tríal bala
collect the information of automatically.
the balances of all accounts
basis,
in our ledger, on this
We have prepared the trial
balance manually.
of The preparation
Financial The Preparation
financial statements financial statements
statements of produc
assurnes the availability of independent
the trial balance.
trial balance
LIMITATIONS OF COMPUTERIZED ACCOUNTIN
SYSTEMS:
The main limitations of Computerized systems are be D
dependent upon the operating ervironment they work in. A
Some of them are listed asfollows:
Heavy Cost of Installation: Computer hardware ne
replacing andsoftware needs to be updated from time to
with the availability of newer versions.
23 Cost of Training To ensure effective and efficient us
computerized system of accounting, newer versions
hardware and software are introduced. This requires spo
training and cost is incurred to train the staff personne
specialists.
Fear of Unemployment: Reflects the feelings of the sta
fhe introduction of computerized accounting system.
stafffears redundancy and show less interest in compute
 an Can

hihly secured and thh

mis
ficlential, when compared
be
Systu volume of
in the
Scalability:
easily with the increase for storing
system cancope data operators
The only additional
business. It requires
additional vouchers.
Computerized AccountingSystem:
Special Features of makes available
and
of accounts time.
preparation
() t leads to quickstatementsand records on
the accounting accounting work and records.
(2) Itensures controlover minimum in computerized
and mistakes would be at
(3) Errors
accounting. statements and records is
accounting
(4) Maintenanceof uniform
possible. information is
reference of accounting
(5) Easy access and
possible.
maintaining accounts is possible.
(6) Flexibility in neat and more
work and is very
(7) It involves less clerical
accurate.
current and future needs of the business.
(8) It adapts to the
 Computerized Accounting System 117
( Disruption in Work: When computerized system is
introduced, there might be loss in the work time and certain
changes in the working environment.
5 System Failure: The danger of a
system crashing due to some
failure in hardware can lead tosubsequent
occurs when no back-up is retained. loss of work. This
I6) Time Consuming: In order to avoid loss
of work at the timne
of system failure, there is a need
for providing back-up
arrangements which is a time consuming process.
(7) Unanticipated Errors Not
Known: Unlike human beings,
computers do not have the capability to judge or detect
unanticipated errors in the system.
(8) Breaches of Security: The danger of
viruses and hacking into
the system from outside creates a strong need for security of
system. Similarly, the person who has created the specific
program can easily defraud by tempering with the original
records.
9) Health Dangers: Extensive use of
many health problems such ascomputers
may lead to
eyestrain, muscular
complaints, backache etc. resultantly reducing working
efficiency as well as increasing medical expenditure.
DATA PROCESSING IN COMPUTERIZED
ACCOUNTING SYSTEM:
Controls in Computerized Accounting System:
Proper transaction authorization: Input controls needs to be
instituted like input data needs to be verified for accuracy
and completeness by a person different from the one who is
keying in the data.
PBesides the above input control, there should be processing
and output controls to ensure integrity of the transaction data
intact.
B) No
authorized access to computer files, data, etc.: All should
be kept under lock and key and proper log is maintained.
Uses of pass word control to access data.
 Accounting software is a type of computer software used by
accounting professionals to manage accounts and perform
accounting operations.
Accounting is the systematic practice, work or process of
ommunicating and recording financial information. In a business
setting, this is done for the purposes of internal and external
audits, required reports and financial analysis to meet legal or
nternal managerial requirements. Accounting may also include
Systematic and diverse measurement, classification, verification,
Summation and interpretation of financial information.
Accounting software can range from simple, single-entry
Programs used for individual record-keeping to more
132 Vipul'sM IT in Accountancy
sophisticated, double-entry systems that can process -M(BA;
receivable, accounts payable, payroll and inventory,
functions. amongaccour
othe
Most modern accounting software is always connected
internet. This means you can connect from any to t
internet-capab
device, like your laptop or smartphone. This online space when
you can access your data is called the cloud. Online
accountalwa
software automatically receives and updates because it's irg
connected to the internet.
Different kinds of accounting software do different thine
Most of them automatically enter, store and analyze data for va
This is especially useful for saving time on tasks like ban
reconciliation. Accounting software also offers useful tools li
invoicing, billpayment, payroll, and financial reporting.
IMPORTANCE OF ACCOUNTING SOFTWARE:
Accounting software is a class of computer programs the
enable you to manage your business's financial transactions. Sud
programs can vary widely in scope, with some
designed for little more than simple progra
designed to manage the entire financialbookkeeping and som
comings and goings
large businesses. Using accounting
use the resources in their software helps companies
can reduce costly accounting departments efficiently, n
bookkeeping mistakes.
Accuracy:
Accounting software can help to increase the
records by reducing or eliminating human accuracy of yo
errors in calculato
Manualbookkeeping
mathematical processes
calculations
on in the in the by involve making a lot
hand.)An incorrect calculation ea
process
balance. Computers, on thecould have a great imnpact on the en

other hand, are virtually

making such errors. However,
software is not immune to human it should be
errors arising
noted that
incapab
from accountin
data ent
or interpretation mistakes.
Speed:
Using accounting software
allows
accounts with greater speed than businesses to process
the

manual processing- Part of

 Accounting Software's
133
speedincrease comes from the use of computers, which are able to
figures far faster than the human brain. In addition,
process
accounting software allows
Bdcing organizations to
introducing automnation. Say, for example, thatincrease efficiency by
a business needs to
record sales tax on all of its transactions.
Accounting software
e could be configured to do that for each entry automatically, rather
nhaving a staff member work out the
tax longhand.
a Cost:
The benefits resulting from the speed and
ng accounting software often go hand-in-hand with reducedefficiency of
wo costs.(The use of an accounting program allows each member overall
ba the accounting team to do more in a given time, of
lH meaning that a smaller team is needed overall) This, inpotentially
turn, can
reduce the accounting department's payroll and administration
osts. However, these savings should always be
the cost of the software itself and any additional
balanced against
th to run it.
hardware needed
Sud
Reports:
Accounting software helps businesses to supply the necessary
members of staff with timely and accurate financial information.
For example, suppose that a company's finance director needs a
report of cash flow to take to a meeting in two hours,) Many
accounting software systems have built-in reporting modules that
enable users to create this type of report by simply filling in a
form or clicking a button) However, creating such a report
manually would be a time-consuming process.
a Tax:

Fling your business taxes can be a complex process, requiring

e
Iyou to keep close track of all your business's transactions.
Account
ensur ing
software helps to make this process easier by
place inIng
that all of your business's financial details are in one
6Teturn
This software
addition, companies such as Intuit and ATX produce tax
Otware that integrates with their accounting programs)
allows you to calculate your return itself semni-automatically,
Jherenan spending time and resources working out the
Necessary details by hand.
 COpaag
month tothe ext, you Can projG
budget and mnake
year or business
projections to create a
purchasing decisions. SOFTWARE'S:
ACCOUNTING invoicing and
EXAMPLES OF and simpleclient businesses
fully-featured than 5 million
Fresh Books: A by more small businesses
used
time-tracking SystemIdeal for freelancers and their processesin
around the world. cycle, and keep ted and mobile
their sales tegra
looking to fast track regulations. Wellinalternative check out
and
line with standards reliable Fresh Books
a
If you need
friendly. comparison articles. accountings
our other managing different
asset for small business
Xero: A handy accountants and
preferred by sole system that works
operations, management
competent accounting priorities, and manages moner
teams. A businesses' rules and coincide with their
in line with a way that will
their budgets in
in and outof missions.
goals and long-term different editions d
several differernt
QuickBooks: Available in company. Beinga
the accounting needs of any
QuickBooks caters to array of insights and
alternative it offers a vast
a worthwhile Xero which will help
companies keep
organizational capabilities their overdue items, payabl
including
accountingdata organized, and contacts' data, and standard
bills, accounting notes, popular for great Profit & Los
accounting operations. Also
reporting. system
definition of what a free accounting
Wave: Itsthe solid QuickBo
businesses should be. A recei&
small and developing
alternative that combines accounting, invoicing, and re
ana
scanning intoone compact and straightforward package,
can integrate it with many third-party applications for sea
 AccountingSo Ware S

141
data migration. Wave is likewise
usage.
Zoho Books: The
fully-optimized for mobile
designed to accounting app of a reputed software family,
to help small
businesses handle their finances and stay
on top of their financial
accounting features, operations.
including cash
It offers an
flow array of unique
sheets, and many more. statements, P&L,
dra Acccounts: A A
powerful reconciliation management
software that provides businesses with the platform to
nsactions in a blazingly fast manner without match their
accuracy. This transaction
matching tool compromising
hile bringing down costs and saving you improves
and your efficiency
precious time that you can channel on other matters. business
Envoice: An automated invoicing software that simplifies your
invoicing processes, making it easy and quick for you to generate
and deliver invoices to your clients and get paid faster than ever.
Cash Manager: An on-premise/cloud-based accounting
software designed to streamline your accounting processes, from
Computation, automated quotation and invoicing,
invoicing, and
reconciliation of banking statements and faster than ever without
sacrificing accuracy.
Declaree: A cloud-hosted expense management solution that
has a mobile app which can be utilized by company employees in
digitizing their expenses. With the assistance of this software, staff
Can instarntly capture receipts instead of manually filling out end
of-month expense forms. This functionality affords companies full
control over their workers' expenditures.
accounting software that are
ere are many other examples of
Popular and reliable.
TYPES OF ACCOUNTING SOFTWARE:accounting &finance
on the type of operations,
Depending
Systems fall under four different categories.
Biling and Invoicing systems companies basic, day-
completeinforming customers on
Bil intasks,
o-day g including check writing and
and invoicing syystems
 all 8y's
paperwork. Before you know boundaries
it, all and get rid of
transformed into digital
and operable printed
data, materials
and
will be
will be part of the past. manual checks
TALLY:
Tally is powerful accounting
technology called concurrent software, which is driven by a
multi-lingual accelerated technology
engine. It is easy to use software and is designed to simply
complex day to day activities associated in an
provides comprehensive solution enterprise. Tally
inventory and data integrity. Tally around
also has
accounting
feature
principles,
global business. Tally software encompassing
comes
thus making it operationally simple. with easy to use interface
Tally accounting software provides a
inventory solution around
order management, stock management, invoicing, purchase
etc. management, discounting, stock valuation methodology,
Tally accounting software also comes with
drill down options,
which can track every detail of transaction. Ithelps in maintaining
 Thus,
le, reliable,
affordable. secure, easy to use and
Features of Tally ERP 9:
deless AccountingcodeSystem:
software's a certain Normally for Accounting
is used for
ledger.
EOR EXAMPLE: Ledger
identifying any particular
and Stationery". Code A2081 indicates
"Printing
Accounting for Complete Group of
prepare a consolidated
Balance Sheet Companies:
for all
You can
the members of
your Group Companies.
,Unlimited Accounting Period: It means you can
records for more than the one maintain the
o FOR Financial Accounting Period.
EXAMPLE: You can maintain the Record for the
Financial Year (F.Y.) 2014-2015 and 2015-2016 for the
same Company.
. Top Level Security for each
Company: You can create
different level of users restrict their
them rights. activities by assigning
FOR EXAMPLE: You can
can create a user for data entry,
only enter the transaction, but who
cannot review the report.
Support Centre: Allows a user can
directly post his support
queries on the functional and technical
j Auditor's Edition: aspects of the Product.
Tally ERP 9 offers a special
Edition of Tally ERP 9, which Auditors'
providesforauditing and
complia
Accountnce
ants.
capabilities
exclusively Chartered
SimultaneousOperation of Multiple
update the data record for more Companies: You can
than one company
simulFORtaneousEXAMPLE:
O
all of our
ly. At the same you can update the data for
companies in the same group.
 Vipul'sMiT in
146 Accounta
Help (Alt+H)
ncy - Il (BL
Online Help: The Tally ERP 9 Online provid
instant assistance on basic and advanced features o
other relevant topics of Tally ERP9.
NET: is an enabling framework which establishe
connection through which the remote user carn access
Client's data without copying / transferring the data.
Facilities with Tally ERP 9:
Budgeting: Allow youyou to analyze the variance for expenses
income etc.
Audit Facility: Using this, you can check the recorde
voucher and make modifications as per requirement.
Data Import and Export Facility: You can import or expor
any particular data from one company to another company.
Scenario Management: It can be projected Profit and Los
A/c and Balance Sheet.
Bank Reconciliation System.
E-Capabilities.
Usefulness in Manufacturing Business: Useful for
calculation of Cost of Goods Sold.
Foreign Currency: Useful for calculation of foreign gain
loss using foreign currency.
Credit Control: It is possible for Customer.
Tracking through Delivery Notes,/ Receipt.
Profitability Analysis of stock.
Accounts for- Indian VAT, TDS, E-TDS,Service Tax.
Ageing Analysis, Price List for Stock Item- Rate of
can be defined with its produ
quantity.
Ratio Analysis, Cash Flow, Funds Flow.
Application Area of Tally ERP 9:
Tally ERP 9is widely used by
ndother
companies and different kinds of busines
accounb
of: Organizations for
maintaining the accou