The Role of Technology in Managing Finance (SQA National 5 Business Management): Revision Note
Exam code: X810 75
How technology is used in finance
Technology allows businesses to manage their finances accurately, efficiently and securely
It helps with budgeting, monitoring spending, processing payments and analysing financial performance.
Spreadsheets
Spreadsheets are used to record, calculate, and analyse financial data.
They can be used to prepare cash budgets, income statements, break-even charts and other financial documents
Advantages | Disadvantages |
|---|---|
|
|
Online banking
Online banking allows businesses to check balances, make payments, transfer funds and manage accounts electronically
It provides instant access to financial information without visiting a bank branch
Advantages | Disadvantages |
|---|---|
|
|
Accounting software
Specialist accounting software is used to automate financial tasks such as invoicing, payroll, and preparing financial statements
It integrates with online banking and can generate real-time financial reports
Advantages | Disadvantages |
|---|---|
|
|
Other technologies
Other technologies used in financial management include
Cloud storage, used to back up financial documents securely
E-payment systems, which allow businesses to receive online payments quickly (e.g. PayPal, Stripe)
Data analytics tools are used to identify trends in sales and spending
Case Study
Glenview Guest House is a family-run bed and breakfast in Pitlochry with ten rooms.
The owner, Iain, used to manage all finances manually using paper records and a calculator.
As bookings increased, he decided to modernise his financial management.
Technology used
Spreadsheets to track income and expenses, and prepare monthly cash budgets.
Online banking to pay suppliers and monitor guest payments instantly.
Accounting software to manage payroll and prepare financial statements automatically.
Benefits
Iain can now check his business’s financial position in real time.
Monthly reports are prepared more quickly, helping with decisions about pricing and seasonal offers.
Errors in payroll and expense tracking have been greatly reduced.
Challenges
Initial setup costs were high, and Iain needed training to use the new systems.
Reliable internet was essential — during local outages, access to the system was delayed.
Examiner Tips and Tricks
Students often describe tools without explaining their impact. Go further – show how technology reduces errors, speeds up reporting, or improves decision-making. Examiners want to see the benefit, not just the name of the software
Unlock more, it's free!
Did this page help you?
