Information technology in the form of the computer has been applied to a wide range of business activities. It is used to perform tasks including word processing, such as typing and storing client correspondence, for statistical analysis, such as performance data analysis and to help in planning future activities. Computers are also useful in supporting electronic communications and information handling, using ways of linking different computers together, such as local area networks or the internet.
Computers software is very good at manipulating numbers and can be effective in supporting many of the tasks that make up the bookkeeping function. There are off the shelf computer software such as Sage and Quickbook and other software specific for bookkeeping purposes.
The bookkeeping functions most commonly taken over by computer software are:
Managing the books of prime entry
Managing the sales ledger
Managing the purchase ledger
Managing the general ledger
Production of a trial balance and the final accounts
Where the computer software performs all of these tasks the user will be required to enter the data from the source documents into the computer, which will then complete the books of prime entry and post the correct totals to the ledgers automatically.
The user will be able to view what the computer has done at any stage of the operation in the same way as a user is able to view the manual process. They will also be able to view the manual process. They will also be able to correct errors that occur due to changes in circumstances or incorrect information given to the computer at the start of the process.
The computer will store the information input to it by the user over a period of time and will output the accounts information on request. This may be useful, for example, in performing credit management when needing to check on debtor balances at any point in time. At the end of the bookkeeping period the computer software will produce a trial balance or final accounts using the data is has compiled and stored during the year.
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