Precision Management for Accounting System

Question: Discuss about the Precision Management for Accounting System. Answer: Introduction The process in which the financial and accounting data which, can be used by the decision makers, are collected, stored and processed is known as the accounting system. It is a computer-based method used to track accounting gravity along with the information technology resources. The design of accounting system is done in the way that they support all the functions of accounting which indulge auditing, reporting and financial accounting management/managerial accounting and the tax (Stafford, Karszes, 2017). Two types of accounting systems are used most widely. They are cloud based accounting system and the traditional accounting system. Difference between cloud based accounting system and the traditional accounting system Previous to the advent of fast and cheap computers, all the accounting works were done manually and the files were kept on the papers with huge binding. The introduction of computers made the accounting system very easy and also it was affordable. There are various differences between the cloud based accounting system and the traditional accounting system (Helo et al., 2014). The difference with regard to various factors are as follows. Factors Cloud based Traditional Speed The speed of cloud based accounting system is amazingly fast. The firm does not have to wait for weeks to know if it is gaining any profit. Once the data is entered and saved, the management gets reports through the programs in a very short span of time. The speed of manual accounting system is slow as all the work has to be done manually and it takes a lot of time. Accuracy the computerized system has increased the accuracy of accounting very efficiently (Abbas et al., 2015). the computers solved the problem of accuracy to the full and thus, the firm can have accurate data whenever calculated In the traditional system, when during calculation, the person who calculated moved from a page to the next, it was difficult for him to keep the records and thus the resultant data was not accurate Cost for small firms, it is easier and cheaper to buy pen, pencil and paper instead of the printer, computer and other accessories (Sah, Shakya Dhungana, 2014). The firms which can afford the computer systems, it is best for them to go for the computers as the price is affordable and once the firm gets whole set, it does not have to worry about the cost anymore. When it comes to finding the employees to operate the machine, it does not costs much as compared to the employees who do the work manually Backups . If the accounting is done on a computerized system, the backup of the original work can be stored such as the CDs and portable external hardware devices by many ways. With computerized systems, backup cam be created every night and if something happens to the data, the previous backup can be used and thus, there is no risk of losing useful data the risk of losing important data is much in case of the manual system (Mital et al., 2015). If the paper gets damaged or destroyed, the work has to be done again. If the copy of original work is created, it can be expensive and time consuming Considerations all the data is stored in a central device in the computer which is the hard drive and thus it is easy to find any type of data in emergency but when it comes to the manual method, various places has to be searched to find a particular data. Accessibility the computerized system, the data can be accessed anywhere, just with the internet connection and thus the managers as well as the employees can access the data anywhere at any time (Asatiani Penttinen, 2015).. The only thing that is required for the access of data is the internet connection. When it comes to manual access, all the papers have to be checked in traditional method. Risks and Limitations with cloud system There are certain disadvantages indulged with the use of cloud accounting system. They are as follows. None of the cloud providers not even the best ones provide this facility (Heath et al., 2014). So it is difficult for all the firma to get that facility. Only the larger range firms can get this benefit. Security Security is an essential part for the development of nay form. The firm needs to keep its data secure in order to improve the performance in an efficient way. Security cannot be ensured in computerized systems. Although the cloud providers provide the best security possible but there are always the risks associated with the important data of the firm (Heath et al., 2014). The firms are not very flexible with vendor switching (Zhou et al., 2015). The firm often has to face problems when they have to switch from one vendor to the other. This might cause loss of important data. The other problem with this system is limited control. Customers do not have control of the data which can decrease the customer attraction of the firm. Recommendations for the size and type of business The wide business should implement this system as it can provide lot of benefits to the large scale business and also it can reduce the expense. It is good for small firms as well (Stafford, Karszes, 2017). It can benefit small firms in many ways such as it can reduce the cost of extra employees who used to perform the manual calculation. Once established, it can reduce the cost of pen, pencil and paper for manual calculation (Heath et al., 2014). Thus, it can be used for any size of business as it has lot of profits associated with it as there are many benefits associated with going computerized. Conclusion Hence, from the above discussion, it can be concluded that cloud based accounting system has various advantages. It can be beneficial for the firm in many ways but there are certain disadvantages attached to it as well. Every firm can implement this system as it has many advantages regarding speed, accuracy, considerations and expenses. It is good for small firms as well. It can benefit small firms in many ways such as it can reduce the cost of extra employees who used to perform the manual calculation. Once established, it can reduce the cost of pen, pencil and paper for manual calculation. It can be applicable to any size of firm and can also be applied to any type of business which needs accounting. Recommendations Some recommendations for cloud based accounting system Password protection- The security of the firm can ensured if all the data is protected properly through passwords and proper care is taken of the data. Trustworthy employees-The employees who are responsible for handling the data has to be trustworthy. Thus, the security issue can be resolved. Reputed vendor- the firm should always go for repudiated vendors in order to get rid of the issue which rises through vendor switching. References Abbas, A., Bilal, K., Zhang, L., Khan, S. U. (2015). A cloud based health insurance plan recommendation system: A user centered approach.Future Generation Computer Systems,43, 99-109. Asatiani, A., Penttinen, E. (2015). Managing the move to the cloudanalyzing the risks and opportunities of cloud-based accounting information systems.Journal of Information Technology Teaching Cases,5(1), 27-34. Heath, A. P., Greenway, M., Powell, R., Spring, J., Suarez, R., Hanley, D., ... 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