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what is electronic accounting?

What is electronic accounting?

Electronic accounting appeared with the advent of the Internet, as companies began to move to the use of electronic accounting programs and online databases; Databases allow keeping accounts online in a way that makes it easy for users to access them without spending money or effort and energy.

Electronic accounting means providing all traditional accounting services via the Internet, where transactions are recorded in databases and can be accessed through various devices connected to the Internet; Such as mobile phones, and this in turn contributes to reducing the time and effort consumed in accessing traditional accounting servicesc.

Electronic accounting is one of the developments that have occurred in the field of accounting, which is based on keeping all accounts on various databases over the Internet without the want to apply the guide method, wherein numerous digital accounting applications are used, and the time period digital accounting has been accepted according with the International Accounting Standards Board and this is what Indicates the importance of electronic accounting in the implementation of various accounting work.
what is electronic accounting?
what is electronic accounting?

What are the main advantages and disadvantages of electronic accounting?

The digital revolution brought about a qualitative leap in all economic fields, and this in turn led to a change in the methods of accounting activities, such as electronic accounting, which is one of the developments at the international level. Among the most prominent advantages and disadvantages of electronic accounting are the following:

Advantages of electronic accounting

Electronic accounting programs allow providing instant financial reports on stock valuation, profit and loss, salaries, sales analysis and other accounting matters that most companies do. Here are some of the most important advantages of electronic accounting:
  • Universal access: Electronic accounting software provides access to databases in real time through tablets and smartphones, which increases the speed of fulfilling customer requests, for example: an e-commerce site merchant delivers a package of products for delivery to the customer At the same time, another customer contacts to know the prices of another product. Through these programs, the merchant can access his database of products and verify the price of the product, thus achieving two products delivery at one time.
  • Provide cooperation: The use of accounting software facilitates cooperation between the accounting department staff despite the geographical distance, for example: if an employee sells a product in a Delhi branch, this product will appear to be sold to the employee in the Mumbai branch.
  • Ease of obtaining and updating information: The use of electronic accounting programs allows the possibility of using data for different users at the same time, and this information will be updated because the records are automatically updated when accounting data is entered or stored, and if there is any error, the arrival of a larger number A member of the accounting department will help to rectify errors and correct them quickly.
  • Providing security: The development of electronic accounting programs aims to provide strict protection that prevents hackers from accessing and penetrating information, which ensures the provision of the necessary security for accounting information.
  • Reliability and Efficiency: Accounting software ensures that repetitive functions are performed without getting tired or bored, which in turn leads to performing the functions in an efficient and highly reliable manner, and this also ensures that time and materials are used in a better way.
  • Providing the necessary reports: These electronic systems enable the creation of accounting reports such as the cash book, trial balance and other easily accessible financial data, which contributes to real-time management and business monitoring and control.

Disadvantages of electronic accounting

There are many advantages that electronic accounting enjoys, but in spite of that there are some negatives faced by electronic accounting systems due to the presence of many problems resulting from the use of computers, for example: data may be lost due to hardware or software damage or even due to interruption The electric current before saving the data, or a virus reaching it, and other defects that electronic accounting can face, and the following are some of the negatives of electronic accounting:
  • High cost: Over time, computers need to be replaced, and electronic accounting software needs to be updated in order to ensure the availability of the latest version, which in turn can be expensive, and the cost of training employees on the latest versions is also expensive.
  • Disturbances at work: The use of new computerized systems leads to a loss of working time and the work environment, and employees fear for themselves that they will be replaced by these systems, which leads to some disturbances in the work environment.
  • System failure: The risks of failure to computers may be one of the most important negatives of electronic accounting as it leads to loss of work, especially when no backup is kept, which in turn will lead to the consumption of time in the absence of a backup.
  • Unexpected errors occur: Computers can be exposed to unexpected errors in the system and because they do not have the ability to control or detect errors, this is an obstacle in the way of business.

Although there are many advantages offered by electronic accounting, it has many drawbacks. Technological development is a double-edged sword, and it is important to know both the pros and cons in order to determine the best option in using manual or electronic accounting.

What is the difference between electronic accounting and traditional accounting?

Accounting is of great interest in all business organizations as it is one of the basic things that are done in all business, so all accounting transactions are handled manually by recording them in papers and keeping them in huge folders, and with the technological development that contributed to providing programs Affordable These accounting tasks have moved to the computer, and although each method has its pros and cons, the two methods perform the same tasks, but with some differences, which are as follows:

Electronic accounting and traditional accounting in terms of accuracy

Electronic systems have contributed to increasing the accuracy of accounting data compared to the traditional system, as the traditional system needs to add columns, transfer numbers from one page to another, and assemble them in the trial balance, and this in turn leads to the occurrence of many errors in addition to the need for a lot of time. As for electronic accounting programs, there are Less room for error as one account is required for each transaction making it easier and more accurate.

Electronic accounting and traditional accounting in terms of time and effort

Speed ​​is one of the most important differences between electronic accounting and traditional accounting, and this in turn leads to reducing the time and effort required to carry out various accounting operations. When using an electronic accounting program, data is entered once and saved, and these programs provide reports quickly compared to traditional accounting Which takes days to complete these reports, and electronic accounting provides access to information within a few minutes, which reduces the time required to prepare reports and answer inquiries.

Electronic accounting and traditional accounting in terms of costs

The costs associated with the traditional system revolve around the use of paper and pencils, and it may seem at first glance that this is cheaper than the company providing a computer, printer and electronic accounting software, but the manual system stops at a certain point, which is the provision of experienced staff, while electronic accounting works from By providing the accounting program that requires an advance cost, and then contracting with an accountant to prepare the accounts and train the employer to use the program, and this in turn leads to making the program more cost-effective, as employers do not need to pay for anything later, all that is needed is Purchase and setup the software.

Electronic accounting and traditional accounting in terms of backup

The difference between electronic accounting and traditional accounting appears in terms of backup when data is lost; In traditional accounting, paper damage or destruction is one of the causes of data loss, which needs to re-create the work again in order to obtain it, while in electronic accounting, computerized systems provide the option of backup through several means, such as: keeping it on a CD or Portable or even online, this enables companies to restore data from backup when they need it.

Electronic accounting and traditional accounting in terms of access to information and security

Traditional accounting allows access to information at any time and at any time through the use of tablets or by using a smartphone. All that is needed is to provide an Internet connection and access to the server and obtain information, while traditional accounting requires going to the workplace and examining and searching papers, as well as Electronic accounting guarantees the provision of data security, as simply entering it into the computer ensures that it is kept and kept safe, especially when backed up on the Internet. It gets damaged quickly.

Electronic accounting differs from traditional in terms of accuracy, time, costs, backup and security, and each party or institution has its own policy that makes it prefer one over the other.

Has electronic accounting contributed to reducing financial corruption?

The use of electronic accounting is one of the ways that ensures the follow-up of financial transactions and all accounting processes from tracking expenses and preparing reports that include accounts receivable, accounts payable and the general ledger. It also works to track inventory, manage customer relations and update data. Having an electronic accounting program is similar to having an internal financial advisor This indicates that the role of electronic accounting in oversight is an important one.

Corruption is one of the main causes of poverty resulting from the lack of accountability and transparency, as the use of the manual accounting system contributes to an increase in corruption, and corruption may be a circumvention of official rules related to decision-making, and corruption occurs as a result of using position or rank for personal interest, and therefore the use of Electronic accounting is one of the reasons that contribute to reducing financial corruption, especially in the public sector, where e-government is one of the factors that help in economic development and reduce corruption.

Therefore, it is necessary to take into account the important role played by electronic accounting, as it represents an important role in oversight due to the efficiency and transparency that it provides, and that all information and data will be available to those who need to review and scrutinize them and search for corruption that may exist, and thus it can be reduced From financial corruption using electronic accounting.
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