Computerised Accounting Systems (Cambridge (CIE) AS Accounting): Revision Note

Digital technology in accounting

What systems can be used for bookkeeping and accounting?

• Businesses can choose to use a manual accounting system

• Manual accounting systems are common in very small businesses, or in those which have operated at a modest level for a long time

• These systems include:

  • Physical journals

  • Physical ledgers

• Alternatively, a digital accounting system may be used, such as:

  • Accounting software (Sage, Xero, Quickbooks, etc) can be used for:

    • Sales ledger accounts

    • Purchases ledger accounts

    • General ledger accounts

    • Cash books

  • Spreadsheets, such as Microsoft Excel or Google Sheets, can be used for:

    • Financial statements

    • Cash flow statements

    • Forecasts

    • Budgets

What are the advantages of introducing a digital system?

What are the disadvantages of introducing a digital system?

• Computers or laptops are needed

  • This is a cost to the business

• Accounting software costs money

  • There might be an initial installation cost

  • There might be subscription costs

• Staff need to be trained to use the software

  • This will contribute to expenses

• There are security issues

  • Data can be hacked just as physical documents can be stolen

• The business is reliant on the digital tool

  • If the tool is unavailable, then the business might be unable to access the information

Security issues

Why does a business need to store data securely?

• If data is not stored securely, then

  • data could be lost

    • The information could be accidentally deleted

    • The user might forget to save after entering the information

    • There might be a technical issue while data is being entered

  • confidential information might be shared

    • The user might access the information on their own personal devices

    • The information might be seen by other users of those devices

    • The information might be sent to the wrong person via email

  • data might be accessed by others

    • Passwords might be guessed by others

    • Data could be hacked

How can a business store data more securely?

• Install firewalls and antivirus programs

• Use secure passwords

• Back the data up either on an external hard drive or on a cloud storage

• Password protect or encrypt the data

• Lock computer screens when away

• Wipe data from computers before disposing