Computer accounting over Paper accounting advantages

There are many advantages from computer accounting over manual accounting. You can get automatically the creditors data, debtors data, sale proceeds, balance sheet, and many more information in the desired manner.

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since accounts are prepared throu computers frauds cannot be commited easilyand also with the help of tally u can easily pass journal entry and also finalisation of accounts

There are more than thinkable advantages of computers for accounting purposes.

First: For management accounting purpose, or for that matter if you are running a company, you need to know exactly whether you are on schedule. That can be done if the accounts are in computers.

Second: For banks, it helps like anything in interest calculation, provision for doubtful debts, writing off of debts, etc.

Third: For police, the use of computers means that data pertaining to all account holders in banks now can be collected and analysed very quickly. So if police want to know if anyone has assets above his disclosed income, then they can do so far too quickly.

Fourth: Records (entries in accounts) can be kept for any amount of time in electronic format. Floods in 2005 in Mumbai showed that paper can be destroyed far too quickly. But electronic details cannot be destroyed that quickly and can be kept very safe.

Fifth: For share trading, after introduction of computers, anyone from anywhere in world can access his demat account and put trade. This has helped in channelising household savings to capital market. And records for that too can be kept for any amount of time.

Sixth: For data entry level, the accuracy can be monitored quite properly. Errors of commission and ommission can be caught fairly easily.

Seventh: Complicated calculations of computing minority interest in mergers/takeovers, calculation of NAV of mutual fund units, up to date position in derivatives segment, profit or loss in equity/derivatives/commodities/forex etc., can be done easily.

Eighth: Since computerisation, all banks have started central processing of financial transactions like clearing and settlements. This means anywhere banking for you. You can deposit funds at one city and travel to another city and withdraw funds from there. No need to actually carry physical cash.

Ninth: Since computerisation, credit cards have come in existence. And that too are used this extensively.

Tenth: By use of computers, international clearing has become far too quick.

I hope this much is enough.

Vasudeo.