Benefits of Computerized bookkeeping systems

The benefits of computerized systems are many:

• Much of the actual debits and credits happens behind the scenes in the program. For example, when you record an invoice, it looks like an invoice on the screen.

• Your balance sheet and income statement appear at the touch of a button. They are automatically generated from the transactional detail.

•  Your invoices, customer statements, checks, and letters to customers and suppliers are generated from the accounting system. There are two benefits: they look more professional coming from the computer, and you save yourself a step. For example, when you prepare an invoice in your accounting system, you print off a copy for your customer, and the software automatically records it in the accounts receivable system. In a manual system,. you would have to hand write the invoice and post it to the books after the fact.

• Searching for historical transactions is easy. Most programs have a "find transaction" function that allows you to go directly to entries that you have made in the past. No flipping pages.  . Most programs have warning functions. for example, if you are recording a credit sale to a customer that is in excess of their credit limit, the system will warn you as you are writing up the sale. It is much easier to track credit terms, outstanding receivables, and other critical customer information with a computerized system.

• Most of the systems will walk you through the initial setup process with wizards. The system asks you a number of questions regarding your business and automatically sets up the recording system based on your industry and your preferences.

As you can see, there are many considerations to take into account in the initial setup process for your bookkeeping system. However, it is comforting to know that you have so many options. Another comforting fact is that no choice is permanent. If you start with a manual system and, after six months, find it too onerous, you can convert your bookkeeping over to a computerized system relatively easily. If you despise the software that you purchased, most accounting software has a conversion function that will import your accounting history and customer and vendor lists with a few clicks of the mouse.