Page 289 - DMGT104_FINANCIAL_ACCOUNTING

Unit 13: Computerised Accounting

Notes

Notes The need for accounting software arises in two situations: (a) when the computerised
accounting system is implemented to replace the manual system or (b) when the current
computerised system needs to be replaced with a new one in view of changing needs.

Accounting Packages

Every Computerised Accounting System is implemented to perform the accounting activity
(recording and storing of accounting data) and generate reports as per the requirements of the
user. From this perspective, the accounting packages are classified into the following categories:
(a) Ready to use
(b) Customised

(c) Tailored
Each of these categories offers distinctive features. However, the choice of the accounting software
would depend upon the suitability to the organisation especially in terms of accounting needs.

Ready-to-Use

Ready-to-Use accounting software is suited to organisations running small/conventional
business where the frequency or volume of accounting transactions is very low. This is because
the cost of installation is generally low and number of users is limited. Ready-to-use software is
relatively easier to learn and people (accountant) adaptability is very high. This also implies
that level of secrecy is relatively low and the software is prone to data frauds.

The training needs are simple and sometimes the vendor (supplier of software) offers the training
on the software free. However, this software offers little scope of linking to other information
systems.

Customised

Accounting software may be customised to meet the special requirement of the user. Standardised
accounting software available in the market may not suit or fulfil the user requirements. For
example, standardised accounting software may contain the sales voucher and inventory status
as separate options. However, when the user requires that inventory status to be updated
immediately upon entry of sales voucher and report be printed, the software needs to be
customised.

Customised software is suited for large and medium businesses and can be linked to the other
information systems. The cost of installation and maintenance is relatively high because the
high cost is to be paid to the vendor for customisation. The customisation includes modification
and addition to the software contents, provision for the specified number of users and their
authentication, etc. Secrecy of data and software can be better maintained in customised software.
Since the need to train the software users is important, the training costs are therefore high.

Tailored

The accounting software is generally tailored in large business organisations with multi users
and geographically scattered locations. This software requires specialised training to the users.
The tailored software is designed to meet the specific requirements of the users and form an

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