What and Why E-accounting
E-Accounting is the new field of accounting. It is the application of online and Internet technologies to the business accounting funtion.The present paper makes an attempt to give conceptual framework of Eaccounting in very simple words. Further this paper highlights the importance of E-accounting in modern business era. E-accounting also provides an affordable plateform where a student can practise its theoritical accounting knowledge and a household can keep account of its monthly inflows and outflows effectively.
Internet usage or Internet users are incessantly growing up. According to internetworldstat.com. There were 360,985,492 internet users till Dec. 31, 2000 in the whole world and 2,095,006,005 users till March 31, 2011 which reflects 480.4% growth between 2000-11. This tremendous growth created many openings in varied spheres of life like Emarketing, E-shopping, E-HRM, E-CRM, E-mail, E-banking etc. So, it can be said that today's world is internet driven world in which everything is e-enabled. In the same beat, now accounting is possible anywhere, anytime through Internet which is known as Online Accounting or EAccounting. E-accounting is new development in the area of accounting and there is lack of knowledge about this new concept. Thus the objective of this paper is to get familiarity with e-accounting and to motivate small businesses to adopt e-accounting.
E-ACCOUNTING: WHAT EXACTLY IT IS?
E- accounting is the use of internet technologies to the organizational accounting purposes. In this process, accounting records exist in digital form instead of on paper. It is an accounting information system, where source records, transaction and accounting entries are received, transferred, reported and filed within or outside the organization electronically. It is web based facility. E-accounting services are offered by various websites in the form of software as a service. They can be accessed online from any internet enabled device running any operation system. There are some websites which are providing e-accounting services which are: www.waveaccounting.com, www.xero.com, www.outright.com, www.saasu.com, www.lessaccounting.com, www.myabakus.com etc. After login to these websites they allow the use of online accounting software. Online accounting software is different from desktop accounting software, because it allow access anywhere from the world at any time in secure environment with multi user access. This facility is not available at desktop accounting software. There is no requirement to take license to run accounting software or to update it time to time. Only thing that is required is internet connection on your computer. A person can directly open any of the above mentioned websites. They provide these services free of cost or charge some notional fees. First of all you have to create your profile on any of these websites and for this purpose you must have an e-mail id. After creating profile, a base is ready to maintain your accounts.
E-ACCOUNTING: WHY IT IS NEEDED?
Every businessmen wants to access or control its financial data or accounts from
anywhere, any time in a secure environment. If a person is outside the country or far from his office and his financial data is in the office or at the desktop of his computer, than how does he access the required information? If you takeout your laptop with yourself than it will hinder your accountant job. If you take a copy of your account in any portable device, it will have to be updated time to time which is again wastage of time and it may lose or may become part of another problem. So, only solution is eaccounting. E- accounting maintains your financial data in a safe environment. In this process, you have a password to access your account and only those persons who have password can access the accounts. It means only authorized persons can access. Eaccounting has visited in India with a rainbow of opportunities. Following are the benefits associated with the use of E-accounting.
BENEFITS ASSOCIATED WITH E-ACCOUNTING:
E-accounting may improve the effectiveness of accounting and reporting tasks, budgeting, controlling and auditing which may reflect on the organization’s effectiveness as well. Almost all purchases and incomes are already tracked by your bank accounts and credit cards. So, instead of re- typing everything into your desktop accounting software or spreadsheet you can import these transactions securely and automatically. It supports e-banking and credit card. Organization's entire accounting project can be easily outsourced by e-accounting system. It generates employment opportunities for software developer and accountants. It reduces cost of accounting or causes cost saving (related to payroll etc). No installation cost, no software update required, and no book keepers required. Most of the websites provide this service free of cost (e.g. www.wavwaccounting.com) Best for small and medium size enterprises. Large storage capacity. No need of in-house book keepers. Allows multiuser access, hence it saves time. If accountant has gone outside the area than he can deal in accounts from that place also (e accounting is free from location and can be accessed from anywhere in the world at any time). E-accounting helps business to keep their financial data in safe secure environment (In case if user computer crashes then their documents are still safe on the remote server)
As we know nothing is 100% ideal in this world. E-accounting also faces some obstacles in its way. So, while using online accounting software it is a must to know which problems may arise, so that, you can use it accordingly.
PROBLEMS ASSOCIATED WITH E-ACCOUNTING
Data security problem. Speed of broadband connection. Network connectivity problem (internet dependency). Required ability to use. Fear of losing your customer data base. If you provide information to a machine or over the internet you can never be sure it really gets to the right place.
1. Patel K. J. (2011), "Adoption and Impact of E-accounting," Golden Research Thoughts, vol. 1, issue 3, pp. 1-4. ISSN no-2031-5063. 2. Alves, M. c.G. (2010), "Information Technology Roles in Accounting Tasks-A Multiple Case Study", International Journal of Trade, Economics and Finance, 1(1), June 2010. 3. www.ecomstor.com 4. www.internetworldstat.com 5. http://en.wikipedia.org/wiki/E-accounting