Computerised Accounting Systems

Need to know

What you need to know

• **System Selection and Setup:** The first step is to choose appropriate software. This depends on the size and complexity of the business. Once selected, the system must be configured. This involves creating the company file and setting up the chart of accounts, which is a structured list of all the accounts the business uses (e.g., Sales, Rent, Motor Vehicles). You also need to input details for customers, suppliers, and employees.
• **Planning the Changeover:** A specific 'cut-off' date must be chosen for the switch. This is often the end of a financial period (month, quarter, or year) to make transferring balances easier. For example, if the changeover date is 1 January, the closing balances from the old system at 31 December become the opening balances in the new system.
• **Entering Opening Balances:** This is a meticulous task. The opening trial balance from the old system must be entered into the new system. This includes the balances on all asset, liability, and equity accounts. Furthermore, detailed lists of outstanding sales invoices (trade receivables) and purchase invoices (trade payables) must be entered for each individual customer and supplier, ensuring the subsidiary ledgers agree with the control accounts.
• **Staff Training:** It is essential that all staff who will use the new system receive comprehensive training. Untrained users are a major source of errors. Training should cover daily tasks like raising invoices, recording payments, and running reports.
• **Going Live:** This is the point at which the new system becomes the primary system for recording transactions. As we'll see, this is often done in conjunction with 'parallel running' to ensure everything is working correctly.