'Bookkeeping Software in Running a Business - Coursework Example

Inaccuracies may also result in fines and penalties being imposed. Moreover, when accounts are manually maintained it is usually kept pending until the last minute, and that too to file tax returns. Accounting is not used as a business tool to keep track of where the business is heading and results in a loss of control during the financial period. Bookkeeping software is also a manual system but within the defined parameters it is possible to produce essential information. The first advantage of using software is that small business would tend to maintain regular accounts than those which do not use software for bookkeeping (Articlebase, 2011).

The bookkeeping software has a set of disciplines due to which it can produce data and records that are essential to exercise control over the business. It also helps in preparing the financial statement at the end of the year including filing tax returns. Records are less likely to be lost or misplaced when maintained through software. Moreover, financial performance can be improved through better financial control. In effect, bookkeeping software automates the manual maintenance of accounting and financial records.

Accounting software saves time as it eliminates manual account calculations and record-keeping (Highland, 2011). The software handles chores in minutes which would take up a good number of man hours and hence can save on fixed salaries. It also helps in analyzing business practices and enables the identification of how money flows through the operations. It also helps in identifying which business unit is profitable and which needs to be shut down. The software package has other advantages like the automatic generation of accounting documents such as receipts, invoices, cheques, and statements of accounts.

Moreover, now plenty of software packages are available and hence it has become as cheap as maintaining manual accounts. Reports can be generated as and when desired. However, software packages come with certain disadvantages. Power failures, data corruption, and hacking of computers are inherent problems that come with the usage of technology (Answers.com, 2011). Data entry errors may occur which would result in wrong data output. Using software packages also requires a thorough evaluation of the reports to be generated and the information required so that the package can be set up to meet the right requirements.

The occurrence of computer fraud is also an inherent risk of internal and external security measures are not proper.