Disadvantages of Computerized Accounting

Computerized Accounting suffers from many limitations. Let us discuss those limitations one by one.

 



1.   Cost of Software: In case of computerized accounting, you must buy the software. Some software requires you to purchase upgrades or updates for additional features. You must also ensure your computer is capable of running the software. If not, you’ll need to upgrade your computer as well. Most accounting software requires you to have additional software in order to view reports. For instance, some programs allow you to export data as a PDF file or an Excel spreadsheet. This allows users without the accounting program to view the data. However, the viewing software may pose an additional expense to the user.

 

2.    Reliance on Computers: If your computer crashes or data is corrupted by a virus, you won’t be able to use your accounting software until the problem is fixed. This also means you won’t have access to any entered data until the computer is running again. Your data can also be corrupted. It means you will have to re-enter information unless you’ve backed up your files. In addition, if there’s a power failure, your software will be unusable unless you’re on a battery-powered laptop.

 

3.    Fraud: Accounting software data requires extra levels of security to prevent fraud and embezzlement. Software makes it easier for users to alter data, making fraud easier to accomplish. As a result, there is an increased need for internal auditors to check for any data inaccuracies. Security measures must also be taken to limit the amount of control users have over any accounting software’s features.

 

4.    Human Error: While it is easy to write down numbers incorrectly, it is even easier to mistype a number. Entering data into accounting software too quickly may result in serious errors. With the program performing calculations, it can be more difficult to trace the cause of the problem. Spreadsheets, digital ledgers or written ledgers make tracking simpler and faster.

 

5.    Training: Accounting software requires you to take the time to learn how to use it. While you may be an experienced accountant, you’ll still need to learn what each button and menu command does in order to use accounting software effectively. This learning curve can result in costly affairs. In some cases, paid training may be necessary to learn how to perform certain tasks. If you’re not tech savvy, the process could be even more difficult.

 

6.    Time: Many accountants find that it takes more time to enter data into accounting software than it does to write it or type it into a spreadsheet. Due to step-by-step screens, the process often takes longer, especially for those who don’t use the software often or are still new to using the program. If the software requires numerous steps to enter basic data, the time requirements may outweigh the benefits of automatic calculations.

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