Technological Trends in Indian Accounting System-Its Impact on Business Management
Shruti Khandelwal, Student, Aryabhatta College of Management*
Ms. Pallavi Ganguly, Assistant Professor**
This research paper focuses on recent technological changes in Indian Accounting System. The emerging scenario of accounting system should not be restricted to the traditional accounting system, rather it should incorporate E-Commerce and software based accounting curriculum.This research paper presents an analysis of Technological Impact of Indian Accounting System on the managing business process of Indian Companies. This advance and technical accounting knowledge and skills can make us more professional in our career. The current work is based on the secondary data which is collected from different sources like research papers to illustrate trends in Indian Accounting Standards to meet the needs of future accounting professionals and also encourage change in accounting curriculum. The conclusion is based on Accounting System as a whole is still in need to reform so that it is proved to be more effective in reducing unemployment and to face the present challenges of global economy in the field of business and industry.
An accounting system is the system used to manage the income, expenses, and other financial activities of a business. An accounting system allows a business to keep track of all types of financial transactions, including purchases (expenses), sales (invoices and income), liabilities (funding, accounts payable), etc. and is capable of generating comprehensive statistical reports that provide management or interested parties with a clear set of data to aid in the decision-making process.
What an accounting system manages
Expenses: The amount of cash that flows out of the company in exchange for goods or services from another person or company are the expenses. In older accounting software or with a manual system such as Excel, it is necessary to manually enter, balance, and categorise each expense. An automatic accounting system allows quick entry, categorisation and automatic balance of expenses.
Invoices: Creating a professional looking invoice is an important part of developing a positive brand image and building confidence with customers. Today, some accounting systems such as Debit allow for instant invoice creation with the ability to customize and automatically keep track of paid invoices and income.
Funding: All the business liabilities, whether accounts payable, bank loans taken to support the business, or mortgages, etc. An accounting system keeps track of these liabilities as payable values and automatically updates the balances as soon a payment is made and accounts are settled.
The historical backdrop of accounting system is a large number of years old and can be followed to old civilizations.
The early advancement of accounting system goes back to old Mesopotamia, and is firmly identified with improvements in composing, tallying and money and early reviewing frameworks by the antiquated Egyptians and Babylonians. By the season of the Roman Empire, the administration approached itemized monetary information.
In India, Chanakya composed an original copy like a money related administration book, amid the time of the Mauryan Empire. His book “Arthashasthra” contains few itemized parts of keeping up books of records for a Sovereign State.
The Italian Luca Pacioli, perceived as The Father of accounting and accounting was the main individual to distribute a work on two fold section accounting, and presented the field in Italy.
The cutting edge calling of the sanctioned accountant started in Scotland in the nineteenth century. Accountants regularly had a place with indistinguishable relationship from specialists, who frequently offered accounting administrations to their customers. Early present day bookkeeping had likenesses to the present scientific bookkeeping. Accounting system started to change into a sorted out calling in the nineteenth century with neighborhood proficient bodies in England converging to frame the Institute of Chartered Accountants in England and Wales in 1880.
Traditional Accounting frameworks are most regularly utilized by private companies, as these frameworks have bring down forthright cost not as much as perplexing accounting programming and are moderately simple to utilize. New or private companies might not have numerous money related sections to make and hence their accounting needs are basic. For whatever length of time that the individual responsible for physically keeping the money related records recognizes what he or she is doing, it tends to be similarly as exact as a modernized accounting system. Another favorable position of utilizing an accounting system is that we can simply open up the book and increase moment access to our records. There is no deferral because of intensity or internet blackouts, and there are no dangers of delicate data being hacked on the web.
How Manual Accounting Works
Any contemporary accounting system records exchanges, identifying with business action, isolated generally into four cycles:
? General Journal
Accounting system utilizes physical records, stack of paper and books which exchanges are entered by hand. Accounting pages have four or more printed columns and multiple rows, natural divisions for the necessary information, such as, Date, Particulars and Amount. Numerical enteries typically have space for every digit.
Diaries and records involve the working and last duplicates of reports, frequently with independent books for the different records. Money deals could be one set, for instance, while finance might be another. The consequences of these working reports are normally joined in the organization’s general record.
Advantages of Traditional Accounting:
• Applies to any business
• Easier to set up
• Can be more flexible than a computerized accounting system
• More secure
• Does not need electricity or batteries
• Greater “impression” of control
Disadvantages of a traditional accounting system:
• Prone to human error
• Longer to generate reports
• More suited to smaller businesses
• Records susceptable to perils such as fire and water
• Disaster recovery plans harder to implement
• Can take longer
• Not particularly suited to environments where there are a large volume of transactions