Accounting Softwares, Types And Risks

Accounting software packages now plays a key role in some small and most medium and larger size businesses resulting in a mainstream move from manual accounting records and excel to more sophisticated accounting software packages or significant use of automation.

An accounting software such as Intuit QuickBooks, Oracle or SAGE reduces the time required to manually compute and adjust accounting records and eventually the number of employees needed to process and record financial information.

This does not necessarily spells an alarm, in terms of the number of available accounting jobs in the future, but instead, will now require employees to enter financial information, maintain these software programs and to update their processing capabilities.

There are different types of accounting software programs. These fall into the following categories:

i. Off-the-shelf - easy to use and are the most economical ii. Enterprise Resource Programs - Much more technical and are more likely to be use by larger businesses or corporations iii. In-house built/bespoke software - these can also be more technical than off-the-shelf and are generally not found on the open market. They are also more expensive than the off-the-shelf software depending on their function.

Senior Accountants nowadays will be more valued if they are also Information Technology Specialists since accounting now relies largely on Information Technology.

The future, which is now here, will require Accountants to utilize their cell phones to access software packages and update their accounting records on the go, including their bank account and their general ledger! This will however result in some amount of risks, which includes:

i. new Information Technology hacking schemes, which as Accountants we will have to be mindful of, especially as it relates to usage of cell phones which are not loaded with the necessary antivirus software protection.

ii. the crashing of a computer or the software program. This however can be combatted by daily backing up of data to a server or a compact disc.

iii. insufficient experience or knowledge being held by employees in the use of an accounting software resulting in data being lost or incorrectly reported (garbage in, garbage out concept).

iv. data entered not being appropriately saved resulting in inaccurate reports being produced.

v. access to sensitive information and modules not being restricted to the right employees resulting in theft of cash and other misappropriations.

The future however is still bright, we will however require a solution for any new computer virus or hacking scheme identified as well as utilizing the right employee to carry out assigned tasks, providing the requisite training in the use of the software, properly securing or backing up of financial data entered hourly or daily to a remote server or to a compact disc and properly designing access to the accounting software.