What and Why E-ac­count­ing

Economic Challenger - - CONTENTS - - Dr. San­jiv Ku­mar & Preeti Jain

Ab­stract

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.

IN­TRO­DUC­TION

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.

REF­ER­ENCES

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

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