Question

the head office of east coast choppers wants to go green and reduce paper use and unnecessary reports. which of an effective accounting information system will allow for the initiative

1. features of an effective accounting information system

Answer 1

The need for developing an effective accounting information sys­tem in a business enterprise cannot be over-emphasized. As the use and control of financial resources are linked to accounting informa­tion systems, it becomes all the more important to carefully plan, design and implement accounting information system.

Need for Computerised Accounting

Its need arises from the benefits of speed, accuracy and lower cost of handling the business transactions. Also, it has the capability to record a large number of transactions with speed and accuracy. It allows quick and quality reporting because of its speed and accuracy.

Manual accounting system requires large storage to keep accounting records, and vouchers. The requirement of books and stationery and books of accounts along with vouchers and documents is dependent on the volume of transactions.

There is a need to reduce the paperwork and dispense with a large volume of books of account. This can be achieved working with the help of computerized accounting system.

Features of Computerised Accounting Environment

1. Simple and Integrated: It helps all businesses by automating and integrating all the business activities. Such activities may be sales, finance, purchase, inventory, and manufacturing etc. It also facilitates the arrangement of accurate and up-to-date business information in a readily usable form.
2. Accuracy & Speed: Computerised accounting has customized templates for users which allows fast and accurate data entry. Thus, after recording the transactions it generates the information and reports automatically.
3. Scalability: It has the flexibility to record the transactions with the changing volume of business.
4. Instant Reporting: It can generate a quality report in real time because of high speed and accuracy.
5. Security: Secured data and information can be kept confidential as compared to the traditional accounting system.
6. Quick Decision Making: This system Generates real-time, comprehensive MIS reports and ensures access to complete and critical information, instantly.
7. Reliability: It generates the report with consistency and accuracy. Minimization of errors makes the system more reliable.