How To Computerize Your Accounts Essay, Research Paper

Mark Demayo

OUTLINE

THESIS: I will explain the steps that need to be taken to computerize business accounts. The steps are planning and informed selecting of hardware, software, and training.

I. Making the decision to computerize

II. Choosing the correct tools

A. Software

B. Hardware

C. New and old technology

III. Installation and training

In the normal course of a day our lives are affected by the technology of computers in ways we can only begin to imagine. ?The word ubiquitous means ever-present or occurring everywhere. This term could be used to describe the use of the computer in the business?(Perry 11). The business world?s benefit alone is enough to make your head spin. Every time you go to the grocery store, the bank, the local ATM, or even the neighborhood gym you cannot help but benefit by the use of computers in modern society. The common civilians? encounter with computers is not the only area where technology has changed our lives. Many fields in business such as accounting depend on the convenience, speed, accuracy, and reliability that computers have become known for. But not all companies are large enough to benefit from the use of computers. First a company must research the impact a computer will have on keeping track of its accounts. Then they must choose the correct hardware and software to best suit their particular needs, while at the same time making themselves familiar with the new enhancements that increase productivity. Finally, the company must allow time for installation and training.

When evaluating the need to convert from a manual accounting system to a computerized accounting system you also need to forecast the future demands of your company. After all to survive in the business world you must anticipate the future and not react to the past. How do you know when it is time to make the critical transition? ?It is when management finds itself unable to keep track of its business. Which products are profitable? Which are not? Which customers pay on time ? Which are delinquent? Having easy access to this data is essential to running a healthy and competitive business?(Stevens 106). When your company has grown so large that management no longer has access to the data used to make informed decisions, then it is probably time to switch to a computerized data management system. These computerized data management systems are often called information systems. The company now has two choices. It can either hire a professional consulting firm to help select and install the computer system, or venture out on its own to make these important decisions. ?Adequate planning is the most important step in assuring the successful use of computer technology? (Perry 23). Most companies would be better off seeking the aid of a consulting firm. They are better informed on the different types of hardware and software that would best suit your computing needs. An outside firm is a better choice because they are less likely to make a costly mistake when choosing the new system. Another benefit to using a consulting firm would be their help in setting-up the procedures for using the new computer system and the necessary training to implement those procedures.

Once you have decided that your company can benefit from computer enhancements it is then a matter of choosing which software and hardware at would be most useful. Software is just another name for the programming that computers run on. It is the language that tells computers what to do. When choosing accounting software it is important to, ?make sure to select the right number and combination of software ?modules? to meet your company?s accounting needs. Most software packages include modules for accounts receivable, accounts payable, general ledger, inventory and payroll? (Stevens 108). The objective is to come up with an integrated system by selecting the modules important to your company. Here is an example of an integrated accounting system. ?Say you send a bill to customer. With manual systems you would have to post it three times: to the sales journal, to a customer receivable account and to the general ledger. But with an integrated computer system you can make one entry and the data will be posted automatically to all the appropriate files? (Stevens 108). There is an alternative to buying packaged software. You can have a custom program written for your company. Custom programs are very expensive. Costing, ?up to $25,000 more, depending on the number of modules you buy?(Stevens 108). They are generally uneconomical and unnecessary. In most cases you are able to purchase pre-packaged software at a fraction of the cost of custom software. The software will be able to handle up to 80% of your accounting needs while you learn to live without the rest or find other ways to accomplish your needs. So when it time to choose computer software, ?never take any thing for granted. Price is not the only consideration. Before you buy, find out what comes in a software package. Read the manuals and determine if the features satisfy everything that you require?(Clark 36).

The next step is selecting the appropriate hardware to handle your computing needs. Hardware comprises all the physical items that allow a computer to run programs, such as a printer, a monitor, a mouse, a keyboard, and a modem among other things. The memory where information is stored on a computer is also considered hardware. When choosing the proper hardware you should not base your decision on price alone. ?Compare several vendors, selecting the one with the best combination of service, training, and warranties? (Stevens 108). Your company will start to rely on that computer, so make certain that you can get it serviced. Try and look for a vendor with a strong service outlet near your company. Also steer clear of systems that have just entered the market, considering the high mortality rate in the computer industry. The company may not be around when it comes time to get service. There are many things to consider when purchasing hardware as well as software, so be sure to give proper consideration to using a consulting firm. They could end-up saving you money.

A good word to describe computers is ever changing, and accounting systems are no different. You should always be on the lookout for new and old computer technology to help your company. Very often you can increase productivity with just a few enhancements. For example, two products have grow more important to accounting over the past few months and are sure to become more popular as time goes on, they are the mouse and multilingual programs. ?The mouse became popular in the early days of personal computers because it simplified their use. Today the mouse and other pointing devices increasingly are being integrated into mainstream accounting programs, especially those for Windows? (Johnson 91). A mouse is most useful when accessing shortcut menus or by selecting icons which are jump gates that perform commonly use commands by merely clicking a mouse button. Icons are the graphical representations of commands. ?Software publishers continue to integrate the mouse and other pointing devices into their programs, making the program easier and faster to use and enhancing accountants? productivity? (Johnson 91). As trade barriers in the world crumble and new accounting opportunities continue to grow. More mid-sized and even small businesses expand their market beyond U.S. boarders, they are then faced with using multilingual computer systems. ?The basic tools that do these jobs constitute a unique class of accounting software especially designed for the international arena?(Lebow and Adhikari 66). As you can see technology does not have to be new in order to be useful. The need for it is what is important. So do not over look anything when searching for new accounting tools.

When you finally make the decision to computerize and you have selected the suitable hardware and software. You must then allow an appropriate amount of time to install the system and also train the employees. The new system may take several months before it is thoroughly up and running, so be patient. When training employees, they can sometimes be hesitant toward computerization. So you must ? extend assurances that the computer is a tool to help them, not to replace them? (Louvau and Jackson 118). The rule of thumb, as with anything, is to be patient.

This whole process of computerizing may at first leave you totally confused. However, if you take everything step by step, before you know it you will be up and running. First make sure it is time change from a manual system. You may only confuse things with a new system. Second, make informed choices when choosing your hardware and software. Perhaps a consulting firm would be the smart way to go. Also remember to keep track of new technology, it can sometimes make your company more productive. Finally, allow plenty time for installing and training. Taking your time may help prevent costly time delays. The most important things to remember are take your time and make informed decisions.

Clark, Frank J. The Accountant and the Personal Computer. Englewood Cliffs: Prentice Hall, 1986.

Cushing, Barry E., and Marshall B. Romney. Accounting Information Systems. 6th ed. New York: Addison-Wesley Publishing Company, 1994.

Johnson, Richard A. “Computer/Technology : The mighty mouse. ” Journal of Accountancy Aug. 1993: 91-94.

Lebow, Marc I., and Ajay Adhikari. “Software That Speaks Your Language.” Journal of Accountancy July. 1995: 65-72.

Li, David H. Accounting, Computers, Management Information Systems. New York: McGraw-Hill Book Company, 1968.

Louvau, Gordon E., and Marjorie E. Jackson. Computers in Accountants’ Offices. Belmont, CA: Wadsworth, 1982.

Perry, William E. The Accountants’ Guide to Computer Systems. New York: John Wiley & Sons, 1982.

Siegel, Joel G., et al., Accountant’s Microcomputer Handbook. Englewood Cliffs: Prentice-Hall, 1987.

Stevens, Mark. “Let Your Computer Do The Work.” Working Woman Apr. 1986: 102+.