What are the main disadvantages of computerised accounting?
What are the main disadvantages of computerised accounting?
Following are the main limitations of computerized accounting :
(i) High Cost: The computerized accounting system is a very costly system. It includes the cost of computers, peripherals and network devices. It also includes the cost of software that is to be used to automate the system. Computerized accounting also includes the cost of media that has been used to take regular backups of data. For example, tape drives and compact disks are generally used for a backup purpose.
(ii) Problem of Obsolescence: Obsolescence is the major problem of computerized accounting. The hardware and software industry is continuously growing at a rapid rate. It has been found that the size of an average hardware chip reduces to its half after every 18 months, that too without compromising on its processing power. Due to such high-speed developments, new hardware devices replace the older ones. The software industry is also growing at a similar rate and newer versions of software are being introduced on a routine basis. Newer versions of software require newer hardware devices to run. Therefore, the organization has to spend a considerable amount of money to purchase new hardware and software.
(iii) Dependence on Computer Accountant: Computerized accountancy requires computer accountants to record and analyze the transactions. These are the people who have complete knowledge of accounts and computers. In a computerized accounting system, a computer illiterate person cannot do anything in the system. The company is completely dependent on computer accounting for all their accounting needs. In few companies, the managers also have the knowledge of computerized accounting but most of the companies depend on computer accountants.
(iv) Problem of Security and Secrecy: The computers are not faithful machines. They just obey the commands of the person who is sitting in front of it. If a person manages to get access to the computer, he or she may harm the information stored on the computer. Several types of other problems like virus or failures may lead to data loss. Computer networks also cause security problems as the information of one computer can be accessed from the other. Very strict and careful handling of the information is needed in a computerized accounting system. This security can be implemented by using separate cabins and lock and key mechanisms or by using password mechanisms.
(v) Training Requirements: The computerized accounting system requires the training of accountants as per the software that has been installed to automate the accounting system. The duration and cost of this training varies with the type of accounting software. The customized accounting software is generally easy to use and require less training. in most cases, the training is provided by the software vendors.
Following are the main limitations of computerized accounting :
(i) High Cost: The computerized accounting system is a very costly system. It includes the cost of computers, peripherals and network devices. It also includes the cost of software that is to be used to automate the system. Computerized accounting also includes the cost of media that has been used to take regular backups of data. For example, tape drives and compact disks are generally used for a backup purpose.
(ii) Problem of Obsolescence: Obsolescence is the major problem of computerized accounting. The hardware and software industry is continuously growing at a rapid rate. It has been found that the size of an average hardware chip reduces to its half after every 18 months, that too without compromising on its processing power. Due to such high-speed developments, new hardware devices replace the older ones. The software industry is also growing at a similar rate and newer versions of software are being introduced on a routine basis. Newer versions of software require newer hardware devices to run. Therefore, the organization has to spend a considerable amount of money to purchase new hardware and software.
(iii) Dependence on Computer Accountant: Computerized accountancy requires computer accountants to record and analyze the transactions. These are the people who have complete knowledge of accounts and computers. In a computerized accounting system, a computer illiterate person cannot do anything in the system. The company is completely dependent on computer accounting for all their accounting needs. In few companies, the managers also have the knowledge of computerized accounting but most of the companies depend on computer accountants.
(iv) Problem of Security and Secrecy: The computers are not faithful machines. They just obey the commands of the person who is sitting in front of it. If a person manages to get access to the computer, he or she may harm the information stored on the computer. Several types of other problems like virus or failures may lead to data loss. Computer networks also cause security problems as the information of one computer can be accessed from the other. Very strict and careful handling of the information is needed in a computerized accounting system. This security can be implemented by using separate cabins and lock and key mechanisms or by using password mechanisms.
(v) Training Requirements: The computerized accounting system requires the training of accountants as per the software that has been installed to automate the accounting system. The duration and cost of this training varies with the type of accounting software. The customized accounting software is generally easy to use and require less training. in most cases, the training is provided by the software vendors.
