With development of economics, people have been thinking about how they could increase the efficiency of working. Technology is one of the ways people figured out. It is the branch of knowledge that deals with the creation and use of technical meaner and their interrelation with life, society, and the environment, drawing upon such subjects as industrial arts, engineering, applied science, and pure science. Before the development of modern technology, there was the trade and barter system. Advances led to a skeleton of what we know as business today.
People handled every aspect of running a business, even the responsibility of making machines work manually. However, the computer revolution sped up the pace of trade and commerce. The technological advances it created drastically reduced the cost of business operations and increased the efficiencies throughout an organization. The basic features of technology are: 1 . Change; 2. Wide spread effect; 3. Self-reinforce; 4. Complex and amoral. 1. Change, There were so many unpredictable fluctuations on technology, single tiny innovations may cause gigantic revolution of the whole industry. Also, the whole process is usually in a very high speed. Wide spread effect, Nowadays, Technologies are not only the tool for improving working efficiencies but also the factors which affect people’s ways of thinking and life styles all over the world.
When the company is facing other competitors, their work explains the impact of the competitive landscape. In the whole business, they bring a high level of professionalism and integrity to business. Accounting provides management with data needed to determine whether a business is at a loss or a profit, how much debtors owe, how much a business owes others, and other financial information. Accounting measures business transactions and as such can help steer managers in the right direction with solid information, not gut-feelings. Basically accounting is a tool for management to employ to help make sound business sessions on a timely manner.
For instance, if by using accounting information, managers notice that the trend is for sales to decrease, then they can take measures to stop this trend. Maybe they need to change prices or decrease expenses to handle the down-trend. The key is that accounting gave them the clue that something may not be going according to plan, playing an important role in business management. For example, if you are running a small business, you may use accounting information for finding if there is enough money for operating and expanding, if not, you may consider some financing behaviors.
Say, you have $30,000 in your account and now you need a huge purchase for new equipment, maybe manager would decide to finance the purchase based on accounting analysis. Also, it keeps an eye on your budget, which is an estimate of income and expenses for a certain point in time. It is a guide to ensure that a business is on track, as planned. Managers should be aware of budget numbers and how they compare to actual numbers. For example, if a postage expense number is almost over budget, managers can research the reason for the excessive expense in that line item and make decisions about that.
If actual versus budget reports show a trend towards more expensive inventory costs, then managers may consider renegotiating terms or prices or even changing suppliers. Although accounting may be heralded as being the language of the business, it is definitely not error free. This has been highlighted by the fact that accounting scams have occurred one after the other for many years. In fact, even after stricter regulation and tightening of accounting rules, accounting scams Just don’t cease to stop. One example is the subjective measurement.
As we all know that Accountants eave to attach a monetary value to every event or transaction that has taken place within the organization. Sometimes the monetary value of the transaction is impossible to be ascertained. Consider the case of depreciation. Accountants can at best provide estimates of the depreciation that should have taken place given the scale of operations. However, these estimates are usually way off the mark. This makes accounting policies open to debate as well as manipulation. Also the qualitative factors should be taken into our consideration; accountants try to attach a monetary value to everything.
The things they cannot attach a monetary value to are not accounted for! Consider the case of goodwill. Until the organization has explicitly paid for the goodwill it purchased from another company, it cannot account for goodwill. According to accountants, the goodwill generated by the firm internally is worthless. We all know that this is not the case and therefore accounting is flawed as far as goodwill is concerned. In addition, some other things would happen like unstable unit of account. Accountants have to measure all transactions in a single unlit AT account .
Nils unlit AT account Is usually ten currency Tanat Is Delve uses In a particular country. However, it is common knowledge that the value of currencies is not stable. Inflation, deflation and such other forces make currency values dynamic. When accountants express assets purchased in last year’s rupees with the same unit as purchased by this year’s rupees, it presents a distorted image. Many companies have low book values because their assets were purchased a long time back during periods of no inflation. (AFC, 2010) Accountants provide information about what has happened.
However, management would be better off if they had information about what could have happened if they used their resources in the optimum manner. This feature is also lacking in accountancy making its usefulness limited from the managerial point of view. That should be the issue when there is no information about opportunity cost. (Swanker, 2010) All even though, accounting is still an irreplaceable of the whole operation process. So for improving these limitations, we use information technologies in accounting process. And some aspects of accounting have truly been ameliorated by the technology.
Firstly, it is equipment. The most obvious impact of technology in accounting is the presence of computers, printers, scanners and faxes. Information technology (IT) transformed the accounting world– no more green paper sheets and pencils. The good news is that prices are affordable on most of the equipment. It is not Just for large corporations; small business can get IT equipment easily and at a reasonable cost. The machines are sophisticated, fast and easy to use. Also the software should be mentioned, besides the equipment, accountants appreciate the software.
For example, spreadsheet programs are highly efficient at helping accountants with calculations and reporting. There are accounting programs in the market that are easy to use and affordable, making them very popular with small businesses. Software can help accountants in their daily tasks, such as paying bills, recording transactions and reporting. The program keeps all data organized and in a centralized location. The third one is internet, it opened many doors and made life easier in many ways, especially in the accounting area, where documents can be shared, research can be conducted and taxes can be filed- all online.
Connection to the Internet can be wireless and simple. Businesses do not have to buy software to run some programs. Instead, some sites host the programs online, where files also can be saved. The last point is security; information technology is used widely in accounting security. Identifications and passwords limit access to confidential information. Instead of binders and papers lying around, security can be greatly enhanced with the proper computer programs. Using a program, accounting information can be encrypted in a way to prevent unauthorized use, making it quite safe.
A lost, stolen or misplaced laptop or desktop computer can be tracked using security software that can be activated remotely. Although information technologies are so powerful, it cannot improve the whole process by one bugle blast. Because all the functions can only be realized when people fully understand and control them. Companies also take some actions for adapting these technologies. For equipment, they may take a large amount of money from their budget for latest computers and high-speed internet server. All the equipment also needs maintenance and it also costs money. Further, they need train their own engineers for secrecy.
For skills, they should hire some accounting staff that is capable AT operating. For Internet, ten manger snouts also take ten Internet equal into their consideration when they choose locations of companies. Even so, accounting technologies are not immutable, new changes keep occurring and companies should adapt them. There are some trends may affect the direction of accounting technologies. The Accountant of the future will be clearly distinct from those of the past and even the present. Therefore, the curriculum offered in our Schools of Technology and Accounting must clearly belie this apparent act .
Electronic Commerce is no longer some fuzzy logic theory postulated by grizzled professors in University Faculties and Laboratories. It is now a Multi-Billion dollar industry where Millions and Millions of transactions take place daily on a global scale within the Trade & commerce Industry of Nations. Online Banking is fast becoming the norm and this will drastically reduce the ratio of Physical Accounting firms to the online Accountant. In the future virtually all aspects of accounting will be done online as Signatory Identification would have advanced to the point where
Today’s biometric encryption and Cryptographic Techniques would have surpassed Security Intrusion Attempts by the ever present Hackers. In much the same way Goods and Trade issues would bear on these facts as the E-business and Enterprise Resource planner Technology would allow a grid system of Interconnected transactions clearly following the Accounting double Entry principles as millions of transactions are carried out daily. But whatever happens, technologies will lead accounting to optimized direction based on its natures.