How Computerized Accounting Accelerates Business Growth

The most essential is computerized accounting, which has various advantages such as accurate data, lower costs, and timely reporting. A computerized accounting procedure employs computers and computer-based programs. Accounting software, for example, can be used to track, coordinate, summarize, review, view, and communicate to stakeholder’s financial information about business activities. It is a computerized system used to simplify financial data inputs and automate accounting processes such as database documentation and report preparation. (Muneerali, 2017)

Computerized accounting typically involves the use of specialist accounting software and digital spreadsheets to keep track of a company's or client's financial activities. It makes good use of modern technical advancements. Organizations today use full accounting software to coordinate all business processes, including outside suppliers and sellers. Computerized accounting systems have largely supplanted manual accounting in practically all firms and organizations, allowing accountants, managers, employees, and shareholders to access critical accounting information at the touch of a button. (Amanamah, 2016)

According to The definition by (Itang, 2020) includes technical instruments as part of the accounting information system, indicating a shift from manual to automated processes. Thus, computerized accounting systems entail the use of computers and related technologies in the collection, recording, storing, and processing of financial data, as well as the interpretation and reporting of financial information to stakeholders. (Al-joubory, 2017) While researching the impact of information technology on accounting information systems, significant accounting information system components identified include accounting processing systems and accounting reporting systems, which are distinguished by functional automation and progress integration.

According to Lose, (Iwu, 2016) Recognizing the importance of small and medium-sized enterprises (SMEs) in economic growth has long been a global undertaking. It is doubtful that the firm will expand if one is absent or too weak. For example, if no opportunity exists, the intention cannot be carried out; if the intention is not motivated by an entrepreneurial vision and energy, opportunities will not be translated into business growth; and if no ability exists, an entrepreneurial intention and opportunity are unlikely to materialize. When these strong ties are considered combined, they have an impact on the owner-manager's critical decision-making process over whether to scale back, maintain a stable state, or expand the small firm The notion is that small enterprises, as determined by (Lynch, 2019)

The CAS is in charge of documenting accounting transactions using various accounting apps on a computer and keeping them in a database. Users of that database generate precise reports. All of the principles of any database study are contained in the fundamentals of a computerized accounting system. The usage of a computer system assists in the simplification, integration, and cost efficiency of all business processes, as well as the accurate presentation of all corporate activities to financial report stakeholders. Because of significant technological advancements, many businesses opt to track monetary transactions using computerized software. It suggests that a closer look at the ontology of small firms, that is, the specification of their conceptualization, is beneficial in identifying relevant theoretical viewpoints within the small company growth literature Small firms, like all organizations, can go through a range of complex changes over their growth stages, making it difficult to establish the organization's identity and track its growth over time. Depending on whether a small business is viewed as all business activities controlled by an individual (group of individuals), a specific business activity (set of business activities), or a governance structure (coherently administered and controlled decision making unit), different growth properties of the small business may be observed. Furthermore, research has shown that tiny firms are part of intricate networks of economic players that rely on the presence of other entities. Because our goal is to create an integrated corporate growth model The viewpoints we employ as the foundation for our model should, in addition to being prominent in the literature, represent the ontological levels suggested. (Skokic, 2017)

2.2. Computerized accounting

According to (Wilson R. A., 2017) A computerized accounting system is an accounting information system that processes financial transactions and events in accordance with Generally Accepted Accounting Principles (GAAP) in order to provide reports that meet the needs of the user. Accounting software is defined as a collection of components that covers all inputs, storage, transaction processing, data gathering, and financial data reporting. Accounting is extremely beneficial and necessary for financial institution development and improved service delivery. According to the poll, the key advantages of computerized accounting are enhanced productivity, increased customer satisfaction, effective man' agreement, and educated decision making.

As a result, a computerized accounting system entails the computerization of accounting information systems that are developed to ease decision making. These are related with various advantages such as the speed with which routine transactions are completed, timeliness, quick analysis, accuracy, and reporting. (Amviko, 2011). According to Munashinge (2015), CAS is roughly characterized as a software tool for processing company financial data. We grouped words like AIS, CAS, accounting software, and accounting system under the computerized accounting information system (CAIS) for uniformity. The adoption of computerization is depending on the size of the business, the firm manager's computer training, innovation, and prospective commercial growth. In almost all enterprises and organizations, computerized accounting systems have essentially replaced manual accounting, providing accountants, managers, employees, and shareholders with quick access to vital financial data. Computerized accounting systems automate the accounting process, increasing productivity and cutting expenses. It is also more exact, faster to use, and less prone to error than the manual system. (Alexis 2016) Accounting data is converted into information to allow speedy decision making through timely financial report preparation and financial reporting. The computerized accounting systems (CAS) demonstrate that computerized accounting tools have a direct impact. Concerning the expansion of the business (MAUREEN, 2019).

Simplicity of Use

The Simplicity of Use can be defined as an appropriate design of AIS that secures business strategies in ways that increase company profitability and improve performance; this design should be described with the simplest way to input data and the simplest way to understand the outputs (Samuel, 2011). The Accounting Information System (AIS) is critical in the performance of accounting operations and activities (Alamin, 2016). The rapid development of information technology in the 1950s resulted in increasing development in information storage and processing (Kharuddin et al., 2010; Oulowa, 2011; Rashid et al., 2002). The usage of information has grown over time as a result of advancements in information technology and its supremacy in analyzing vast amounts of data and providing results.and in producing accurate and timely reports. Because of the special properties of information technology, massive information systems such as the Manufacturing Resource Planning system (MRP), Human Resource System (HRS), and Accounting Information System (AIS) have been introduced. Over the years, technical advancements in information systems have undoubtedly altered the channels via which enterprises are conducted,Increased organizational reliance on information systems pushes organizational management to focus on enhancing information system quality. (Gorla et al., 2010).

Flexibility

Flexibility is an important topic in AIS (Genus and Dickson, 1995). Flexibility is the system's ability to switch or shift from planned activity. Flexibility is defined as the ability to adapt to changes aligned with future organizational needs. According to Rezayian (2001), an information system must be flexible in order to be integrated into the future. According to one expert, flexibility flows in the organization as a critical success factor (CSF) strategy when most organizational products and systems are coupled in an environmental circuit (Evans, 1991). feels that flexibility is a smart response to the organization's future demands.

Firms are expanding and evolving. They develop new items, avoid non-profitable activities, and focus on more profitable ones. adjustments in corporate units frequently result in accounting system adjustments. A flexible system can adjust to changes in firm units while remaining relatively unchanged. (Zanjani,2012) identified a gap between the current and ideal state of accounting software in terms of adapting to future changes in the firms under consideration. In relation to accounting information, the term "flexibility" is typically perceived negatively. Flexibility in reporting is sometimes opposed by standard-setting bodies because it jeopardizes the implementation of accounting standards and may result in information that lacks comparability and consistency. Their goal is to achieve harmony and, when possible, standardize accounting methods so that similar transactions and events are regarded consistently by all organizations. As a result, financial reports now resemble compliance records rather than communication tools (AIMR, 1993, p.79). According to Johnson and Kaplan (1991), Management Accounting failed to evolve because it was dominated by Financial Accounting's stringent standards approach. According to Peters (1991), a fixation with financial measures contributes to the current inflexibility of information systems. The changing needs of their users should determine the output of information systems, and thus their input as well. If information systems are to become more adaptable, they must become more client-centered.

Reliability

The Sys Trust service framework is an assurance service established jointly by the American Institute of Certified Public Accountants (AICPA) and the Canadian Institute of Chartered Accountants (CICA). It is intended to boost the comfort of management, customers, and business partners with technology that support a business or specific activity. SysTrust is a sort of assurance service provided by a qualified CPA or CA to independently test an organization's system and provide assurance on the system's reliability. The goal is for all who use or rely on the system, including the company, its partners, and customers, to gain trust and confidence in it. Based on the assessment of a system's dependability, a set of principles and criteria exist that are grouped into five areas that are primarily relevant to system reliability and the reliability of an organization's financial data reporting, as follows. (AICPA, 2017).

Business Growth

A study by Munasinghe (2015) 40% of small businesses use CAS to handle their accounting data, according to research. Demographic characteristics have no effect on CAS utilization, according to the same study, with only the company's size, costs, and external environment having a significant impact. As a result, development firms should provide small businesses with a variety of options for minimizing the cost of CAS software development. Raising awareness of CAS's competitive benefits among small enterprises may also aid in their acceptance of new technology.Imre et al. (2016) An energetic story of a small organization's initial desire to adopt a CAS results in a collection of data about the organization's extent and IT preparedness, social conventions, and the characteristics of a prominent personality, such as the proprietor, are all factors that play an important role in CAS acceptance to the small enterprise business and highlight other related factors. Because of the dependability and speed of CAS's backups, a current account balance was available in time for management decision-making. saving time and obtaining more precise and organized financial reports (Lewis, 2020).

Relationship Between Computerized Accounting and Business Growth

Financial reporting in the small and medium-sized business industries has greatly improved as a result of computerized accounting systems. Small and medium-sized firms in Sri Lanka's South Eastern Region appear to have issues presenting financial reports using a computerized accounting system when compared to other industrialized and growing nations. the implications of financial reporting among small and medium-sized enterprises (SMEs) in Sri Lanka's south-eastern region using computerized accounting systems (CAS). A survey of small and medium-sized firms was also carried out to determine the extent to which computerized accounting systems had been designed and implemented. The possible consequences of this introduction on productivity and outcome indicator improvement were then investigated. An analysis was performed to examine the potential impact of implementing computerized accounting systems on productivity and outcome indicators after they were implemented. (Shiraj, 2018)

Accounting information systems are defined as "a set of interrelated activities, documents, and technologies designed to collect data, process it, and report information to a diverse group of internal and external decision-makers in organizations" by the Accounting Information System Standard. Computerized accounting systems (CAS), which utilize computers and related technologies, schemes, and methods to the accounting function and process, have emerged to overcome the limitations of manual accounting systems and the increasing complexity of accounting operations. Recently, there have been various discussions and research on the use and efficacy of computerized accounting systems by firms all over the world. Previous research on the evaluation or assessment of computerized accounting systems (or accounting information systems) has focused mainly on their qualitative characteristics. Among the qualitative characteristics of these CAS are integration, speed, accuracy, timeliness, and information scope. (Meiryani, Susanto, and Sudrajat, 2019).

Small business owners who fail to adopt contemporary technologies risk losing out to competition. Using Davis's technology acceptance model (CAS), this study sought to analyze how small business owners in Central Ohio came to embrace and employ computerized accounting systems. Another assumption is that all organizations use an accounting system. The shape and structure of the system are determined by the business owner based on his or her preferences, knowledge of previous systems, and personal understanding and talents. There is no prohibition on using outside accounting resources such as bookkeeping services or certified public accountants (CPAs). The fact that business owners understand and recognize basic accounting concepts like profit and loss is a mitigating factor. Small businesses function as platforms for social interaction and creativity. Armstrong (2010). This research could help small business owners understand how CAS adoption and use can improve information flow, increase employee collaboration, and minimize the chance of failure. (Alsaaty, 2012). Edison et al. (2012) A innovative method to technology adoption was used to explore the factors impacting SMEs' lack of adoption of computerized accounting information systems. The use of a computerized accounting system has consequences outside of the firm. One of the primary beneficiaries of the deployment of a computerized accounting system is the company's external accounting firm. (Kapp & Heslop, 2011). Among the arguments advanced are the ability to share information, increase efficiency, quickly comply with rules, strengthen internal controls, and improve financial management.. ( Dereshiwsky, & Mayer, 2016).

Conceptual Framework

conceptual framework we will explains the relationship between three (3) independent variables, and one (1) dependent Variable as showing below

According to above conceptual framework between Independent Variable and dependent Variable There are many ways to measure business growth in accounting. Some of the most common metrics include: Revenue growth: this is the most basic measure of business growth, and it simply measures the increase in revenue from one period to the next. Profit growth: this measure takes into account both revenue and expenses, and it shows how much profit the business is making as it grows. Gross margin: this metric measures the percentage of revenue that is left after the cost of goods sold has been deducted. A higher gross margin indicates that the business is making more profit on each sale. Net profit margin: This metric measures the percentage of revenue that is left after all expenses have been deducted. A higher net profit margin indicates that the business is making more profit overall. Return on investment (ROI): This metric measures the amount of profit that is generated for every dollar invested in the business. A higher ROI indicates that the business is making more efficient use of its resources. (Smith J. , 2023)

Conclusions

Finally, the study concludes its findings in relation to the study's purpose, which was to investigate the factors influencing the installation of computerized accounting systems on businesses in Mogadishu. The ease of use, flexibility, and dependability of computerized accounting systems in small and medium-sized businesses. The primary goal of this research was to look into the impact of ease of use on business growth in Mogadishu, Somalia. The second goal was to investigate the impact of flexibility on business growth in Mogadishu, Somalia. The third goal was to look into the impact of dependability on business growth in Mogadishu, Somalia. According to the study findings, business users' technical knowledge, abilities, and experience favorably contribute to the adoption of CAS.

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How Computerized Accounting Accelerates Business Growth