Changes in technology have a major impact on managerial accounting. IT networks and computer systems have shortened the lead time which is needed by accountants to prepare and present financial information to management and shareholders.
Not only has technology shortened the lead time, but it has also improved the overall efficiency and accuracy of the information. Companies can now use IT to develop and use computerised systems to track and record financial transactions. Paper ledgers, manual spreadsheets and hand-written financial statements have now all been translated into an electronic form that can then quickly present individual transactions in financial reports.
Some of the most popular accounting systems can also be tailored to suit specific companies or industries. This helps companies to create individual reports quickly and easily for the purposes of management decision making. Changes can also be made relatively easily to reflect economic changes in business operations.
Computerised accounting systems also provide better functionality by increasing the timeliness of accounting information. By improving timeliness, accountants can prepare reports and operations analysis that can give management an accurate picture of current operations.
The number of financial reports has also been improved. Cash flow statements, departmental profit and loss and market share reports are now more accessible with computerised systems. Most systems also have internal check and balance measures to ensure all transactions and accounts are balanced before financial statements are prepared.
Accuracy can also be improved by limiting the number of accountants who have access to financial information. Computerised systems allow accountants to process large amounts of financial information and process it quickly through the accounting system. Quicker processing times has also lessened the time needed to close out each accounting period. Shortening this time aids companies in cost control. Computerised systems can also improve external reporting to outside investors and stakeholders.
Not only has technology shortened the lead time, but it has also improved the overall efficiency and accuracy of the information. Companies can now use IT to develop and use computerised systems to track and record financial transactions. Paper ledgers, manual spreadsheets and hand-written financial statements have now all been translated into an electronic form that can then quickly present individual transactions in financial reports.
Some of the most popular accounting systems can also be tailored to suit specific companies or industries. This helps companies to create individual reports quickly and easily for the purposes of management decision making. Changes can also be made relatively easily to reflect economic changes in business operations.
Computerised accounting systems also provide better functionality by increasing the timeliness of accounting information. By improving timeliness, accountants can prepare reports and operations analysis that can give management an accurate picture of current operations.
The number of financial reports has also been improved. Cash flow statements, departmental profit and loss and market share reports are now more accessible with computerised systems. Most systems also have internal check and balance measures to ensure all transactions and accounts are balanced before financial statements are prepared.
Accuracy can also be improved by limiting the number of accountants who have access to financial information. Computerised systems allow accountants to process large amounts of financial information and process it quickly through the accounting system. Quicker processing times has also lessened the time needed to close out each accounting period. Shortening this time aids companies in cost control. Computerised systems can also improve external reporting to outside investors and stakeholders.
