Advantages of Computerised Accounts

  • Standardised format
  • Quick to enter data
  • Manual calculations eliminated
  • Reports produced from system

Disadvantages of Computerised Accounts

  • Less accessible for non-financial people
  • Training required
  • Untrained users may make mistakes which are difficult and costly to resolve
  • Poorly set up systems may make audit more difficult
  • Cheap or inappropriate packages may not incorporate sufficient controls

There are many software packages on the market at present, some very expensive (e.g. Sun Accounts, Pegasus) and some very affordable (e.g. QuickBooks, Sage, Mind Your Own Business, Microsoft Money).  

Some software has integrated payroll.  

Before deciding on whether or not to computerise the accounts, you will need to satisfy yourself on the following questions:

Is there really a need to computerise?

Is there the level of expertise and knowledge to operate a computerised accounting system not only now, but also in the future?

Is the hardware compatible?

Can the system be set up internally or does the business need to buy in the expertise to do this?

Can the business afford it?

The process of computerising accounting records has several stages:

  • Assessing the needs of the business
  • Preparing a specification
  • Choosing a package
  • Implementation plan
  • Testing
  • Parallel running
  • System operational

Needs Assessment

Listed below are some sample questions you should consider:

  • How many transactions do you need to process in a month – e.g. number of purchase invoices, number of receipts and payments?
  • Do you need to use the accounts system to provide invoices to clients?
  • Do you sell any goods or services on credit?
  • Do you only supply after cash received?
  • How many different activities or areas of work do you have?
  • How many different sources of income do you have?
  • How many different expenditure categories do you have?
  • How many regular suppliers do you have?
  • How is the business likely to expand in the future?
  • How many staff do you have and how do you prepare the payroll?
  • What sort of reports do you want and how often?
  • Do you need different reports for different people?

Specification

Having looked at the above, a specification of what you want from the system can be written.  It may not be possible to get everything needed from one package and you may have to compromise in some areas.  However it is still better to start from what you want.  Each package can then be measured against the specification.

  • Pensions and Maternity Leave

    Pensions and Maternity Leave The Equality Act 2010 which came into force in October 2010 (and was strangely not widely publicised at the time) states that if..
  • Student Tax

    Student Tax Currently, students who are employed solely in the Summer, Christmas and Easter holidays can complete form P38(S) which allows them to be paid without the deduction of Income Tax.  The introduction of RTI (Real Time Information) will mean ..
  • Real Time Information

    Real Time Information (RTI Background ..

Client Area Login