What is The Impact of Information Technology on Accounting?
As with any industry, advancements in technology allow us to do what needs to be done but with even more efficiency. Information technology (IT) networks and computer system software have revolutionized the way modern accounting is performed. Gone are the days of handwritten statements, paper ledgers and manually filling out spreadsheets. Instead, computerized accounting systems installed with internal checks and balance systems process this information much faster than before. Information technology accounting may sound like a daunting concept but to help you understand how IT affects your finances, we’ve put together a list of ways we utilize the technology for your benefit.
Faster Data Processing
The introduction of computers changed the game for accountants by decreasing the time it takes to calculate, analyze and sort data. The respective software being utilized eliminates the drawn out process of manual accounting and does all calculations for you. With faster processing speeds, computer programs specifically designed to deal with large numbers expedite information that would normally take hours to properly go through. Last minute adjustments and audits can now be corrected with minimal time and effort. IT’s impact on shortening time needed to process data increases overall efficiency for both the accountant and company being audited.
Advanced accounting information technology has had a similar impact on improved speeds as it does with increased accuracy. Manual accounting used to rely on the accountant’s ability to correct errors and tediously double check figures before finalized completion. While human error is still possible when inputting information, computerized accounting systems minimize all of the potential errors when computing data to give a highly trusted result. With the assistance of computerized accounting technology, data transactions are properly recorded directly into financial statements, in turn speeding up production and availability of information.
Ease of Use
Advances in information technology have drastically improved the functionality of accounting. Designed with the ability to quickly process large amounts of data, computerized accounting systems expedite information neatly and accurately. Computerized accounting systems make market share reports, cash-flow and department profit and loss statements more accessible and easier to prepare. With the data already inputted to the system, IT accounting software allows you to search through previous years, specific keywords and reorganize data with the click of a button through an improved interface. This type of organization is unmatched when compared to the traditional ways of accounting via written ledgers and handwritten spreadsheets. Increasing the timeliness of calculating financial figures with the help of streamlined use allows accountants to promptly provide the necessary management, financial advice, records and any information needed when requested.
Improved External Reporting
The way accountants can now report on data with improved techniques allows them to quickly relay findings back to management. This rapid process of reporting accurate findings provides investors with necessary information and shorter lead times. This data is essential for companies who are looking to expand business operations and rely on potential new investors. Through comprehensive improvements to IT accounting software, reports can be issued to outside investors containing information essential for making important business decisions. The technology will shorten the overall turnaround time when a client needs access to information in a relatively short timespan.
Financial Accounting in Parsippany, NJ
Information technology has comprehensively simplified the field of accounting. At RMG, our dedicated team of accountants and consultants are committed to providing you with a stress-free accounting experience. Providing services to a variety of industries, look no further than RMG for help with your finances. Give us a call at (973)-712-5000 to schedule an appointment with us today so we can improve your business function with cutting-edge accounting technology and applicable methods for the highest quality service in New Jersey.