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), COMPUTERISED ACCOUNTING SYSTE\,, , SSS, INTRODUCTION, , Accounting was done only manually, a few years back. The person who, accounting job was normally called ‘Munimji’. With the arrival of fast comp, use, accurate and reliable software, started a new phase of Computerized Accounting: every business whether small or big is using computerized accounting. i, , , , , Financial and Accounting Systems should be studied in different angles. At the ;, understanding the system from one angle another angle should not be neglected., Accounting Systems does not necessarily mean software or Computerized Systen, , include many other aspects also., , , , , , Different Requirements from Different Persons, Accountants View: Balance Sheet, Profit & Loss Account etc. should be prepared eas, , e, without putting much efforts / time., , e Auditors View: Balance Sheet, Profit & Loss Account etc. should be correct at any p, of time., , e Business Manager/ Owner’s View: Manager/ Owner should get right information at rs, time for taking right decisions., , It is the job of any Financial and Accounting System to cater to needs of all the ws, , simultaneously., , An accounting system is a collection of processes, procedures and controls designed to coli:, record, classify and summarize financial data for interpretation and management dee's's, , , , , , , computerized accounting system is an accounting information system that process*, sial transactions and events as per Generally Accepted Accounting Principles (G.\ \, . reports as per user requirements. Every accounting system, manual or computs!

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ii, , 1 yputerised Accounting System, Com, , 45, , rirst, it has to work under a set of well-defined concepts called accounting principles. Another,, that there 1S a user-defined framework for Maintenance of records and generation of reports. Ina, computerized BccounuDs syste the framework of storage and processing of data is called, operating environment that consists of hardware as well as software in which the accounting, system works. The type of the accounting system used determines the operating environment., Both hardware and software are interdependent. The type of software determines the structure, of the hardware. Further, the selection of hardware is dependent upon various factors such as, , the number of users, level of secrecy and the nature of various activities of functional, departments in an organization., , In case of small organization, where the number of transactions are less and their variety is, relatively limited, a Personal Computer (PC) with standardized software may be enough., However, for a large organization, with geographically scattered factories and offices, more, powerful computer systems supported by sophisticated networks are required to handle the huge, , data and the complex reporting requirements. In order to handle such requirements, multi-user, operating systems such as UNIX, Linux, etc. are used., , Modern computerized accounting systems are based on the’concept of a database. A database is, implemented using a database management system, that manage and organize data effectively, and provide access to the stored data by an application. Any database-oriented application has, four basic requirements as given below:, , e Front-end: It is a link between the user and database-oriented software through which the, user communicates to the back-end database. For example, a transaction relating to sale of, goods may be dealt with the accounting system through a sales voucher, which appears on, the computer’s monitor of data entry operator and when entered into the system is stored in, the database. The same data may be queried through reporting system say sales analysis, software., , e Back-end: It is the DBMS, that is hidden from the user and responds to the requirement of, the user to the extent the user is authorized to access. Remember, every authorized user is, not given access to entire data. Access is generally given on ‘Need to Know’ and ‘Need to, , do’ basis., , ° Data Processing: It is the process that is performed on raw data to transform the raw data, into information; that can be used by decision makers to take appropriate decisions., , e, , Reporting System: A report simply means presentation of information in proper and, , Meaningful way. Basically, reporting system is a system of regular reporting on the predecided aspects., , ve | xz}

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46 Information Technology in Accountancy - IT (S.Y.B 4 PF. SEnay A, REASONS FOR SEPARATE FONT END AND BACK END SOFTWARE, , Domain Expertise: Front End software is meant for handling request from users, Back Bag, software is meant for storing and handling data., , Presentation: Front End software interacting with a user is meant for presenting information in, proper format, different colours, bold, italic letters, tables, charts ete. Back End software is nog, meant for it and it cannot be expected also., , User Experience: Front End software should guide a user to the desired report or feature, Front, End software handles processed data and not raw data like Back End. Front End Software, should be user friendly but, that is not the case of Back End., , Speed: Using single software for both the aspects would unnecessarily increase the load ;, slow down the speed. Separate Back End software is used for handling data only. This reduces, the load and increases speed of operations., , Language: Front End speaks in the language understood by the user and understands lan, spoken by the Back End. Back End speaks in technical language not understood by layman,, Front End can deal with both the languages, user’s language and technical language., SPECIAL FEATURES OF COMPUTERIZED ACCOUNTING SYSTEM:, , DERMAL FEATURES OF COMPUTERIZED ACCOUNTING SYSTEM:, , 1. It leads to quick preparation of accounts and makes available the accounting statements, and records on time., , 2. _ It ensures control over accounting work and records,, 3. Errors and mistakes would be at minimum in computerized accounting., 4. Maintenance of uniform accounting statements and records is possible., 5. _ Easy access and reference of accounting information is possible., , 6. Flexibility in maintaining accounts is possible., , 7. It involves less clerical work and is very neat and more accurate., , 8. It adapts to the current and future needs of the business., , 9. It generates real-time comprehensive MIS reports a, critical information instantly.

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d Accounting System 47, , rise, , icon, , oNCEPTS IN COMPUTERIZED ACCOUNTING SYSTEMS, , , , es of Data: Every accounting system stores data in two ways: Master Data and Non-Master, gransaction) Data. Master data is relatively permanent and not expected to change frequently., fon-master data Is non-permanent data and expected to change frequently., Data, , , , , , , , I, 1, Non Master, Master, (Transaction), , “Master Data: As defined above, master data is relatively permanent data that is not expected to, change again and again. It may change, but not again and again. In accounting systems, the, master data can be: Accounting Master Data, Inventory Master Data, Payroll Master Data and, Statutory Master Data (GST rate, TDS rate etc.). Statutory changes are made by Government, and we have to update the Statutory Master Data accordingly., , faster Data, , 1, Accounting Master Data: This includes names of ledgers, groups, cost centers,, accounting voucher types etc. Name of the ledgers such as Land & Buildings, Plant &, Machinery, Purchase, Sales etc. (all the ledger names) are created once and not expected to, change again and again. Even opening balances are brought forward from last year to, current year is also a part of master data and expected to change., , , , , , , , , , , , , , [ I, Accounting Inventory, Master Data} Master Data, , I 1, Payroll Statutory, Master Data| Master Data, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , 2. Inventory Master Data: This includes stock items, stock groups, go-downs, Inventory, Voucher Types etc. In case of trading organization stock item is something which is, bought and sold for business purpose whereas in case of manufacturing organization stock, item is the Raw Material, WIP, Finished goods etc., , 3. Payroll Master Data: Payroll is another area connecting with Accounting Systems., Payroll is a system of calculation of salary and recording of transactions relating to, employees. Master data in case of payroll will be Name of the Employee, Designation of, Employee, Salary Structure, Pay Heads etc. These data are not expected to change, frequently. Designation of Employee, Salary Structure, Pay Heads may change but it, Temains as it is for a longer period of time so, you can say these are relatively permanent., , Statutory Master Data: This is a master data relating to law. It may be different for, different types of taxes. E.g. GST (Goods and Service Tax) rate, TDS (Tax Deducted at, Source) rate etc. This data is also relatively permanent. We don’t have any control on this

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48 Information Tec nology in Accountancy - I] SY BAP : SE;, é K ly,, , Jata as statutory changes are made by Government and OED Yeam organization, In Case }, , data as statutory changes ve need to update our master data of, , changes the tax rates, forms categories, we need ‘ |, {, |, , Non-Master Data: It is a data which is expected to change frequently, again and again nd, , a permanent data. E.g. Amount recorded in each transaction Ni be tees every tj ‘4, expected to change again and again. Date of transaction will not be the same for al] th, transactions. e, , Let us understand the concept of Master data and Non-Master (Transaction) data with Pe, example: Your Name, Your Pasa Names, Date of Birth, Blood Group, Address, Gender n°, are the examples of Master data because it is not expected to change. Your address nay ¢| nge, but not frequently. Your Age, Weight, your likes and dislikes etc. are the examples of Non., Master (Transaction) data., , Why Master and Non-Master (Transaction) Data?, , Basic objective of accounting system is to record input in the form of transactions and generate, output in the form of reports., , Let us take a simple example: On 4" May, 2018, Printing and stationery charges paid in cash, ¥30,800 to Super Fine Prints. The transaction will be recorded as under:, , , , , , , , Payment Voucher No: 49 Date: 4" May, 2018, Printing and Stationery Expenses A/c = Dr. 30,800, To Cash A/C -Cr. 30,800, , , , Narration: (Being Printing and Stationery Charges paid to Super Fine Prints), , The above transaction will be recorded in Accounting Information Systems in the form of, Master Data and Transaction Data as shown below:, , , , , , Master Data Non-Master (Transaction) Data, , Voucher Type (i.e. Payment Voucher in this ‘Voucher Number (i.e. 49 in this case), case), , , , , , , , , , Debit Ledger Name (i.e. Printing and Debit Ledger Amount (i.e. € 30,800 in this, Stationery Expenses A/C in this case) case), , Credit Ledger Name (i.e. Cash A/C in this Credit Ledger Amount (i.e. = 30,800 in this, case) case), , , , Date of Transaction (i.e. 4 May, 2018), , , , , , , , Narration