Redefining Information Technology’s Importance in Modern Accounting

Computers, servers, the Internet, wireless technology, and personal digital gadgets have forever changed how we do things; companies go about their business.  On the other hand, software programs have also enhanced traditional operations and production.  Because of the evolution of information technology, accounting has made enormous strides.  Accounting databases, ledges, are accounting books shifts into software that specialize features for business operations.  The advancement of Information Technology should be adapted to enhance accounting’s functionality.

Undoubtedly, modern accounting produces timely financial reports necessary for operational analysis and decision-making.  This improves the timeliness of financial information that accountants prepare every reporting period.  Also, it gives good management of accurate picture of current operations.  Through its computerized systems, cash flow statements, departmental profit and loss, and market share reports are now more accessible.

Another benefit of information technology in modern accounting is that it permits an accountant to process information and transactions in less time and with less effort.  Computerized accounting systems enable accountants to quickly process enormous volumes of financial data through the accounting system.  Individual transaction processing times have become faster, reducing the time required to close each accounting quarter.  Closing reporting periods at the end of the month or year can be particularly draining on accounting departments, which can result in longer hours and higher labor costs.  Shortening this period helps businesses control costs. It also improves the overall efficiency of a business, entity, or organization.

Modern accounting also attracts financial investors.  When reports passed outside, it would be easier for them to engage investors and stakeholders to be in with it.  Investors can determine if a company is a good investment for growth opportunities through the improved computerized accounting system.  It attracts potential high-value companies to utilize our resources, providing them with higher income.  Henceforth, companies can utilize these investors for equity financing, which they use for expanding.

Contrary to the three affirmative statements above, modern accounting is prone to system failures and bugs.  Since it uses technology as a software basis, it shares problems that overlook the possible disadvantages.  Some of these are bugs that may hinder a company from reporting on time or malfunction the maintenance system.  Perhaps, the loss of electric power systems and the internet may also be a factor that could damage the system.  However, specific problems and disadvantages are worth considering if a company uses accounting software.

Among other disadvantages, integrating information technology in modern accounting refutes the assurance that accuracy and free from errors.  Every system has its weaknesses, and there is no perfect software that could drive a one hundred percent success rate.  It may ensure that all transactions and accounts are balanced adequately before financial statements, but it only reduces the errors that come with it.  Nevertheless, accounting errors could also result from mistakes or misunderstandings of accounting rules, which I suppose is inevitable.  Hence, those mistakes must be looked at and reviewed many times before inputting or making accounting reports.

An advanced information system should be adapted for propitious and feasible accounting functionality enhancements.  Its accounting information systems significantly improve the gained skills for accountants.  More so, it brought opportunities for companies to perform the accounting functions more effectively and efficiently as it brought significant time and cost savings.  The use of information technology to perform accounting functions has brought a chance for companies to progress toward paperless offices.  Finally, it can allow companies to apply production systems more effectively and save money.