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What is computerized accounting?

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Quick Answer

Computerized accounting refers to using computers for a range of accounting tasks. In the past, computers were used as calculators. Modern computers perform a number of additional tasks and provide analytical information.

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Most of the first commercial computers were used by businesses. Before computers were available, companies hired people to perform manual calculations. For large companies, the costs were high. While these computer were expensive, they were more affordable than hiring full-time employees, and they worked much faster.

Personal computers made computerized accounting far more affordable, and even small businesses could afford some of these early systems. While information still had to be entered manually, these computers could analyze the information almost instantly and generate simple reports. Most of these systems have been replaced, but some businesses still rely on systems purchased in the 1980s.

Computers handle a broad array of tasks. Point-of-sale systems are often tied directly to accounting software, enabling instant updates. In addition, modern systems can provide a number of analytical reports with useful insights. Increasingly, companies are using cloud-based platforms. These platforms allow managers and business owners to access information from anywhere, and they outsource server tasks to remote servers. The advantages provided by computerized accounting platforms make them nearly ubiquitous for medium and large businesses.

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