Computerised Accounting System

• A computerised accounting system (CAS) refers to use of computers in performing accounting functions with the help of application softwares i.e. accounting softwares.
•  It eliminates necessity to create and maintain journals and legers.
• The basic requirement of CAS are accounting framework and operating procedure. Operating environment is a framework of storage and processing of data in a computerised accounting system.
• Types of hardware and software selected depend on secrecy level, types of users, number of users etc.
• Computerised accounting has far superior features as compared to manual accounting in terms of recording of transactions, generation of reports, adjustment entries etc.
• However in both the systems identification of financial transaction is done by the accountant.
• Advantages of computerised accounting systems include high speed, accuracy, up-to-date information, automated document presentation, scalability, quality reports, etc.
• CAS has many limitations also like high cost of training, staff opposition, system failure, computer frauds and crimes, health problems etc.
• Database is an application that manages data and allows fast storage and retrieval of data, for example ORACLE & SQL SERVER. Database varies with basic requirements like front end i.e., Developer/2000, Visual Basic,etc., and back end interface i.e., Microsoft access, data processing i.e., segregating numbers into relevant groups, aggregating them, taking ratios, plotting, etc. and reporting system.
• Application of computerised accounting system includes Spread sheets, General ledger, Accounts receivable, Payroll software, etc.
• Automation of accounting process implies carrying out the accounting function by means of accounting software where human intervention is minimum.
• Stages of automation involve planning, selecting appropriate accounting software and hardware, preparing chart of accounts, grouping of accounts and generation of reports.
• Grouping of accounts refer to process of coding the accounts in a manner that they appear properly in financial statements.
• Process of grouping involves giving a code to each main head, sub-head and thereafter individual account heads.
• Financial reports can be classified as statutory reports and MIS Accounting software is the application software that records and processes accounting transactions within functional modules.
• It functions as an accounting information system and may be purchased from third party and developed in-house by the company.
• Accounting software packages classified into ready made software, customised software and tailor made software.
• Factors of sourcing accounting software are flexibility, cost of software, size of organisation, reputation of the vendor, fulfillment of business requirements, etc.