An Investigation into Electronic Accounting System Advantages

This research report delves into the significance of electronic accounting systems within the financial sector. It examines the advantages of these systems, including enhanced data security, streamlined financial transactions, and reduced errors compared to manual processes. The report explores various types of electronic accounting software, such as cloud-based and enterprise solutions, and their impact on business operations. It also identifies challenges faced by companies during implementation, such as data theft and lack of management information, and suggests potential solutions like cloud storage and ERP systems. The study employs a qualitative research approach to investigate the importance of electronic accounting systems in achieving business goals and objectives, offering recommendations for overcoming implementation challenges and optimizing financial processes. The report analyzes the current trends in electronic accounting, offering insights into the role of technology in improving the efficiency and accuracy of financial reporting, decision-making, and overall business performance. The findings emphasize the need for businesses to adopt electronic accounting systems to remain competitive and ensure effective financial management.

Accounting Research

Abstract
The electronic accounting system assists the company to secure the data reliably and keep tracking the
financial transaction of the company as well. Advancement of the technology has made the accounting
systems more clear and transparent. Use of electronic accounting system has reduced the errors and
mistakes that were seen in the manual processes. Recording of accounting transactions had become
more faster enabling the company to effectively evaluate the data and deciding about accuracy and
reliability of recorded transactions. Advanced software provides increased security to the accounting
data as no person without the proper authority could access the accounting information. In the same
way, the current study will determine the importance of using this advanced tool and system within a
firm to meet the defined aim. It will provide how electronic accounting systems have helped the
organisation in making the process more faster and secured. The literature review clearly describes the
importance of the accounting system within a firm. It analyzes how this system will help the company
save time and present the report without any error. It provides about the different methods that are
used by the firms under electronic accounting system for recording transactions. It will also provide
about the role of accounting systems to help in achieving goals and objectives. There are challenges
faced by firms in using the electronic accounting systems in their organisation and are discussed in the
report. Further, the study also shows that the company faces a different problem in order to implement
a new system within a firm, which, in turn, affects overall results, such as the theft of data, loss of
confidentiality, weak reporting service, and lack of management and security. Using qualitative study
methods, the researcher can meet the defined aim and analyze the importance of using the e-
accounting system within the financial sector.

TABLE OF CONTENTS
Abstract............................................................................................................................................2
INTRODUCTION...........................................................................................................................4
LITERATURE REVIEW................................................................................................................5
Theme 1: Electronic accounting system......................................................................................5
Theme 2: Different type of electronic accounting system...........................................................5
Theme 3: Importance of e-accounting system for business.........................................................6
Theme 4: Problem faced by the company to develop an electronic accounting system..............6
Theme 5: Ways to sort out the problem.......................................................................................7
RESEARCH QUESTIONS.............................................................................................................7
RESEARCH METHODOLOGY.....................................................................................................7
DATA ANALYSIS..........................................................................................................................9
How do electronic systems help in decision making?.................................................................9
DISCUSSION................................................................................................................................11
CONCLUSION .............................................................................................................................12
Recommendations......................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
In the era of digital technology, most of the company uses advanced technology to meet the
defined aim. In the same way, the current study also helps to determine the importance of using the
advanced tool. The entire study will shed light on the electronic accounting system, which offers a safe
means of storing and assessing the data to run a business in a better manner. Therefore, accounting is
the term that determines the financial performance of the company and analyzes how the company
manages the data in order to meet the defined aim. Nowadays, most of the company uses an advanced
accounting system such as BIS, which saves time and perfection in work, which is not possible in the old
system (manually).
That is why, through this current report, the researcher wants to create awareness of using an
electronic accounting system that assists in monitoring the financial performance and transaction. Most
of the company uses advanced techniques and accounting software to calculate all necessary
calculations and keep the full details of clients as well. However, at the same time, the company also
faces many problems, such as losing confidentiality and many more. So, through the present study, the
researcher uses a secondary data collection method to examine the importance of using an electronic
accounting system to generate the best results in the literature review section. Also, through this topic,
the researcher creates awareness among large businesses so that they will start implementing the
system, which, in turn, assists in taking business at a further level of success.
Purpose: The purpose of this research study is to understand the importance of using the
Electronic Accounting system.
Aim: This research report states, "To investigate the importance of using electronic accounting systems
within a financial sector."
Research Objectives:
 To determine the concept of the electronic accounting system.
 To analyze the importance of using the e-accounting system within a firm.
 To identify the problems face by the company while implementing the e-accounting system.
 To recommend the ways through which the company overcome the challenges.
Research questions:
 What is the electronic accounting system?
 What is the importance of using e- accounting system?
 What are the challenges which the company faces while implementing the electronic accounting
system?
4

 What are the ways through which the problems are minimized within a business?
LITERATURE REVIEW
Theme 1: Electronic accounting system
According to Khudir (2016), an electronic accounting system is a computerized software
program that helps a business to register online and smoothening the business operations as well.
Through the e-accounting system, the company is monitoring all the activities of a firm, including
financial performance. Such that handling bank accounts, bills as well as planning schedules.
As per the view of Noori (2018), It is the computer-based gadget that is based entirely on
information communication technology to capture and process the business's financial data. So, it is a
fast and advanced reporting that provides invoices and automatically updated the data into a computer
system, which helps to save time and monitor performance.
Theme 2: Different type of electronic accounting system
By Fatima (2016), Cloud accounting software is a type of e-accounting software with a company that is
comfortable with Xero, Sage 50, and different products for cloud accounts. These types of software are
available publicly and help the small entrepreneur perform the business account in a better manner. On
the other side, AL-Amro and et al. (2017) stated that Enterprise accounting software is another form of
software that is used by a large business as well as a financial institution. This software is used for
sophisticated safety features and also monitor client relationship. Thus, it can be stated that these two
online software is used by the company to track the financial transaction within a firm.
Swanson (2020) presents their views that the business uses electronic accounting software for
cloud accounting systems such as Fresh books, This is a suitable application for graphic designers and
smaller companies to monitor the selling process and provide quick customer invoicing facilities, can
help the customers as well. On the contrary, Thanagamesh (2020) argued that Tipalti is another cloud-
based accountable payable program that simplifies the payment system for end-to-end transactions.
This system is used worldwide for payable transfer and avoids the distributor’s large sums for yearly
online bank payment. Thus, it can be stated that with the help of the e-accounting system, the company
is easily managed, and it is essential for an organization’s effective management system.
Theme 3: Importance of e-accounting system for business
The electronic accounting system plays a vital role in the business. It helps manage the money
transfer, and Yatsenko (2016) stated that though the system is complex to handle, this is designed to
handle all the monetary problems for big business. Earlier, the accounting system is performed manually
and also, preserving the account book also took enough time. As a result, the chances of error increase.
5

That is why to save from these problems, there is a need to introduce the e-accounting system. As per
Warren, Jonick, and Schneider (2020), accounting software is close enough t the local business because
it helps save time with the electronic accounting system. The company can streamline the entire system,
and chances of error are also minimized.
In addition to this, it is also stated that e- accounting system minimizes error, which leads to
perfection in work. If there is one error in accounting, which leads to generating wrong results, then
installing this system will lead to ensure the consistency in a job because there is no possibility of error.
Also, Yashina (2020) supported that accounting programs have become a critical requirement of every
company, whether small or large. The owner of the firm has also begun to suspect that handling the
financial system in absolute error is necessary because it helps generate the exact outcomes and helps
the company successfully manage the expenditure. That is why it can be stated that there is a need to
implement the e-accounting system within a firm so that it will help to manage all the financial
transactions correctly without any delay.
Theme 4: Problem faced by the company to develop an electronic accounting system
Introducing e- accounting system within a firm also leads to generate different problems such
that Esmeray and Esmeray (2020) stated, theft of data is the biggest problem which the firm is facing. It
is so because copy the information stores in a machine and then send it to adversaries is tough. Even
with an advanced communication channel, the executives are submitting one enterprise's private data
to the next. This has increased the chance of theft of data and increases cybercriminals.
On the other side, Al-Obaidi (2020) also shares their opinion that when a company installed a
new e-accounting system, a lack of management information is considered a problem. It is due to the
lack of using key performance indicators that preparation is rarely adequate and leads to face many
difficulties as well. Delayed accountable payable is another problem because when a company refuses to
pay receipts on schedule, it increases the risk of receiving late payment penalties and reduces financial
health. That is why it directly increase the weak reporting service, and as a result, the company's
customer relationship has got affected.
Theme 5: Ways to sort out the problem
If implementing the e-accounting system has a problem, then it also has a solution. As per the
Swanson (2020) storage in the cloud, the best solution can be used by the company, it is a web-based
reporting system that saves the maximum number of documents in a safe location. Through this system,
the company efficiently manages the documents and filters with customer search filtering from a single
platform that improves organizational efficiency. On the other side, Alathamneh (2020) considers a
multifunction ERP is another solution which helps to sort out the problem, that integrating financial
6

functionality with data analysis software. Further, this solution assists in taking to modeling and instead
of planning for liquidity problems, and that is why ERPs are the best method which helps to resemble a
machine in order to monitor the financial performance of the firm.
RESEARCH QUESTIONS
 What is the electronic accounting system?
 What is the importance of using e- accounting system?
 What are the challenges which the company faces while implementing the electronic accounting
system?
 What are the ways through which the problems are minimized within a business?
RESEARCH METHODOLOGY
The research methodology is a specific procedure and a technique that is used to determine,
select, and analyze the information related to the topic. There is a different vital element of the research
methodology section that helps to research in a better manner.
Research type: Generally, there are three types of research types: qualitative, quantitative, and
mixed. Quantitative approach involves non descriptive, numerical and applies mathematical or statistical
tools for analysing the data and information. It is iterative process where researcher has to evaluate the
evidence obtained from research. Qualitative research is descriptive, non numerical and involves
application of reasoning. It evaluates the reasons and how this influence the decision making. Mixed
research on the other includes both qualitative as well as quantitative paradigm characteristics. This
type of research involves deriving meaning feelings and describing the situations. Among all three,
qualitative research type is taken by the researcher, which mainly focus on getting data through open-
ended or conversational communication (Diaz-Kope, Miller- Stevens and Henley, 2019). Using this
method, the researcher can meet the defined aim, and by collecting non- numerical data, the researcher
interprets the data that helps to accomplish the defined goals of the research.
Research Approach: Another critical element which is a plan and procedure which consist of
broad assumption to the precise method of data collection and analysis. Hence, this researcher
addresses the problem, which is based upon nature. There are three types of research approach,
deductive, inductive, and Abductive (Kumar, 2019). In deductive approach data is collected for
evaluating propositions or the hypotheses connected with existing theory. Inductive gathers data for
exploring phenomenon, identifying themes as well as patterns for creating conceptual framework. On
the other abductive approach collects data for exploring phenomenon, to identify themes & pattern, for
locating them to conceptual framework and testing this by subsequent collection of data. Among all,
the researcher uses an Inductive research approach, which helps to apply the theory and start with the
7

observation. This is an effective approach used by researcher for drawing more reliable results from the
research. Hence, using this methodology, the researcher quickly determines the importance of the
electronic accounting system for the company and also analyzes the pattern to conclude.
Research Philosophy: It is a notion through which the researcher is gathered, analyzed, and
used the data in order to meet the defined aim. There are four types of research philosophies that
Interpretivism, Realism, Positivism, and Pragmatism. Among all there, the researcher uses the
Interpretivism research philosophy that interprets the data and also integrates human interest into a
study (Gray, 2019). This is branch epistemology focused to assess the differences among the human as
the social actors. Issue of the difference lays emphasis over differences between conducting study
among people instead of objects like computer and medicines. In the philosophy social roles are
interpreted in research and are presented in own meanings. Also, through this philosophy, the
researcher examines a more precise manner and answer the research question i.e., the importance of
the electronic accounting system.
Data Collection: Data collection is the method through which the researcher collects the
information, analyzed, and interprets the same. There are two types of data collection methods:
primary, in which researchers collect the information on their own, and it is known as first handed
research through survey, questionnaire, observation. Next is secondary data collection, which is already
conducted by others, and the researcher collects the information through books, journals, and
magazines. Secondary data provides all the information that has been aleady been researched
previously by the researchers. Between these, the secondary data collection method has been adopted
by the researcher in which relevant books, articles, and Journals are selected, which are published in the
last five years, so that it will help to determine the importance of e- accounting system in the company.
The researcher has also used authentic information available over the websites for deriving more
reliable information for drawing accurate conclusion over the research.
Data Analysis: It is the process of cleaning, transforming, and modeling the data to generate the
best information that helps make better decisions. Further, there are two types of data analysis
methods, such as qualitative and quantitative. Between these, qualitative data analysis has been
adopted in order to generate the best results and accomplish the defined aim and objectives as well
(Quinlan and et al., 2019). Further, through this data analysis method, the researcher readily determines
that e- accounting methods are beneficial for the company or else, it affects the entire system by using
secondary research methods.
8

Research limitation: During the research, scholars analyzed that researchers face issues such
that not having enough time for conducting the research is to consider one of the most significant
limitations. Scarcity of time has made the researcher to rush over some areas which could have not led
the researcher to draw more reliable results. This, in turn, affects the results of research negatively.
Alternatively, else, most of the sites are access denied, and this also took enough time to select the best
article that does not affect the outcome negatively. There are number of articles available related to the
research and it is a challenge to select the most important and data related to the research. Identifying
data that is authentic also consumes considerable time.
Validity and Reliability: Reliability and validity of the research depend upon the method which
is selected by the researcher. In the current study, the researcher also chooses the best article and
journals published within the last five years, so with the help of these books, the article, the researcher
also meets the defined aim and objectives, concludes the results as well. The information has been
evaluated and interpreted with the proper guidance of seniors and experts from the field. They have
helped in accurately understanding the meaning and context of information to come over more
accurate results. This increases the reliability of the results drawn in research.
DATA ANALYSIS
How do electronic systems help in decision making?
Decision making is one of the most crucial parts of the business. Along with the time and growth
of the digitalization process of decision making has also changed. Invent of digitalization has facilitated
the decision making systems to a great extent. Electronic system is used at large scale by the companies
nowadays for decision making and also in carrying out other operations of the business. There are now
various electronic systems that are used by the company in decision making. With the help of these
electronic systems, companies can conduct a meeting without the members' physical presence to meet.
It means the electronic systems has made companies to conduct meeting anytime and from anywhere
of the world. Using the electronic systems directors and members could attend the meeting from
anywhere in the world without requiring to attend the meetings physically. It saves considerable time of
members and the company. This is very effective in situations where the quick and immediate decisions
are required to be taken by the entity. Meeting could be held held virtually on immediate basis for
taking decisions. They could be present virtually to discuss the topic and make effective decisions.
An electronic meeting system is a software that is established to provoke decision making and
problem-solving in a group. Features of the electronic systems have facilitated online meetings. These
9

are referred to as e-meetings taking place online. EMS has provided the platform for facilitating the e-
meetings that facilitate greater participation of the members that are away from the place of meeting. It
has helped the organizations to conduct a meeting to make significant decisions immediately without
waiting for the members to gather at one place to discuss the business of the meeting. It also saves the
cost of conducting a meeting for companies and saving considerable time and facilitating faster decision
making (Rayole, Thales 2017). The electronic system is also useful in providing training and making
sales presentations. For instance, the company can make a discussion of its new products to test the
appeal among the employees, who have background knowledge in proposed offerings. Employees and
members could share their opinions and reducing the criticism of potential conflicts.
Management Information is another electronic system that consists of software and hardware,
which serves as the backbone of organizational operations. Companies are using it to gather data and
information from the multiple systems online, analyze the information, and report data to help manage
decision-making. This management information has helped the organization make more accurate
decisions by providing updated and accurate data over various company assets, such as inventory,
personnel, financials, and real estate and has enabled the firms to collect data from several sources at
one place and make them accessible to the managers for analyzing the data running the reports. Using
such system companies has become very beneficial in making the decision-making process. The data
available with the companies are much accurate and timely that enables them to make reliable
decisions. The centralized system enables management to access information from anywhere in the
world through internet services. The availability of data makes it possible for the managers to access
data for making an informed decision for the company without making any delay. It could be analyzed
that there are various ways of improving the operations of the company. For example, it enables the
company to make decisions by comparing sales to boost revenues.
Electronic systems have reached far high levels for making sound decisions. Decision Support
System is a computerized program that is used by most of the companies nowadays for supporting
determinations, courses of action, and judgments for decision making in the organizations. DSS screens
through & analyses extensive data compiles comprehensive information that is used for solving
problems and decision making. It has enabled firms to collect data from various sources and analyzing
the information. Managers synthesize data for producing more comprehensive reports. It, as an
informational application, differs from the ordinary operation application that only collects data.
Companies are using DSS systems as per their requirement as it could be fully computerized or
powered by humans. The ideal DSS system analyses the information collected related to the area for
10

which decision is to be made and decides after analyzing the data. This system has enabled users to
make decisions quicker (Bledzhyants and et al., 2019). Also, it has facilitated the managers in evaluating
the data about various business operations based on the information collected from various sources.
The outcomes of the DSS give the managers an analysis of the proposed decisions. It provides support to
the managers for making decisions on the judgement provided by the system. Electronic systems have
facilitated the decision making to a great extent. It has enabled the business managers to collect, store,
and analyze the data for making much reliable and informed decisions.
Group decision support system (GDSS) is interactive computer system used for facilitating solution
for unstructured issues and problems by the group of decision makers that are working together as
group. Some of the tools such as electronic meetings and video conferencing also supports process of
group discussions but main focus is over communication. It provides tools & technologies that are
explicitly geared towards making group decisions.
These electronic systems helps the business to analyse and evaluate critical data using software. It
provides the company with more accurate solutions analysing the data. Company undergoes number of
transactions during the year and without the use of electronic systems it could not record all the
transactions accurately and clearly. These systems help in summarising the information and presenting
in a way that enables the managers in making effective and sound decisions.
DISCUSSION
Through the secondary research, it is analyzed that in the modern era, every company needs to
change its existing business operation so that it will help to meet the defined aim and take a business at
a further level of accomplishment. In the same way for the accounting sector, there is a need to use e-
accounting system within a firm to handle many bill accounts and resolve the issue of expenses and
income. That is why there is a need to implement the system so that company performs work online
without any error, while through the manual system, there is lots of error, which in turn affects the
results and consumes time as well. On the other hand, the data analysis section also analyzed that the e-
accounting system is considered one of the most effective methods that help to handle all the monetary
problems in big business. This statement is also supported by Khudir (2016) that this system included a
much online software system, which in turn helps the company to effectively leverage the tools of their
finance division so that chances of error are minimized.
In addition to this, it is also analyzed that electronic accounting systems hold massive records
and are also useful for local businesses that help a person save time and perfection at work. Such that
11

this help in financial planning which means that it helps the corporation control their expenditure in a
better manner so that the company takes a further level of success as well. Nevertheless, on the other
side, the data analysis section clearly states that many companies in the world use this advanced tool in
their business in order to smooth the functioning of business such that it uses the DSS system, which
helps a firm to save time. However, they do not know that these online systems also affect the
functioning of the company.
CONCLUSION
In the end, it concludes that the use of technology in accounting results in an authentic and
more reliable decision-making process. The use of accounting is necessary for the success of the
company as it only helps the company in assessing whether the company has attained a high level of
profits or not. If not, the technology will help the company assess the areas the company needs to
improve. The present research also assisted in spreading the awareness relating to the use of electronic
accounting system in order to get information relating to profit and loss of the company. Also, this
accounting system electronically helps the company to review and oversee the company's performance
and success more effectively and efficiently.
The current research majorly focused on the electronic system that is the study of the
computerized software in order to use for the managing of accounts and related information. Also, with
the research's help, it was highlighted that there are many different types of the electronic system
which could be used by the company like Xero, Sage 50, Enterprise accounting software, and many other
types of software. After the research, it is found that the use of the electronic system is useful for the
company, as it helps the company in accurately assessing and reviewing accounting and financial
information for effective decision making. However, with the analysis of the theory and facts and
figures, the company also saw many different challenges encountered by the company at the time of
using the electronic accounting system, such as lack of management information system, resources, and
many others.
Recommendations
From the above all discussion, it is clear that there is a requirement for the company for
upgrading its electronic accounting system. Thus some of the recommendations to the company are as
follows-
The first and foremost suggestion for better use of the electronic accounting system is to train
and educate the employees using these systems. It is basically because of the reason frequent changes
and up-gradations occur within the technology, and this needs to be adopted by the employees. Thus,
12

providing appropriate training is the best way of adopting the latest technology within the company.
Also, there are many new additions within the existing technology, so the company has to continuously
research the business environment that which new technology or another version of existing technology
has come. It will help the company in using the latest technology so that the company will perform in a
better manner.
Another important recommendation for the company is to install the Enterprise resource
planning software. This software is necessary because it will help the company properly plan and
execute all the different types of planning required within the company to monitor and evaluate the
company's financial performance. Thus, this system of ERP will help the company in assessing the areas
where the company is lacking and requires improvement.
13

REFERENCES
Books and Journals
Rayole, M., Thales SA, 2017. Electronic system, onboard modular execution platform and method
ensuring partitioning of configurable decision-making rules. U.S. Patent 9,582,299.
Bledzhyants, G.A., and et.al., 2019. THE EFFECTIVENESS OF THE MEDICAL DECISION-MAKING SUPPORT
SYSTEM" ELECTRONIC CLINICAL PHARMACOLOGIST" IN THE MANAGEMENT OF PATIENTS
THERAPEUTIC PROFILE. Artificial intelligence.
Khudir, I.M., 2016. Implementation of Electronic Accounting System in Business Environment. Imperial
Journal of Interdisciplinary Research. 2. p.128.
Noori, N.A., 2018. Peer-to-Peer Electronic Accounting System. Available at SSRN 3213131.
Fatima, H., 2016. Impact of E-Accounting in Today's Scenario. International Journal of Engineering and
Management Research (IJEMR). 6(1). pp.260-264.
AL-Amro, S.A. and et.al., 2017. The quality of financial reports in the risks of electronic accounting
information systems in the Jordanian commercial banks. Int. J. Econ. Res. 14(9). pp.107-122.
Thanagamesh, M., 2020. Digital (E-Accounting) Accounting System in India. Studies in Indian Place
Names. 40(70). pp.1621-1624.
Yatsenko, V., 2016. A Company-Specific Business Process “Accounting of Cash on the Bank Accounts” in
the Global Electronic Payment System. ICT in Education, Research and Industrial Applications.
Warren, C., Jonick, C. and Schneider, J., 2020. Accounting. Cengage Learning.
Yashina, O., 2020. Inventory Accounting System Using System Engineering Methods. In III Annual
International Conference" System Engineering".—Ekaterinburg, 2020 (pp. 198-202). Knowledge E.
Esmeray, A. and Esmeray, M., 2020. Digitalization in Accounting Through Changing Technology and
Accounting Engineering as an Adaptation Proposal. In Handbook of Research on Strategic Fit and
Design in Business Ecosystems (pp. 354-376). IGI Global.
Al-Obaidi, A.Q.H., 2020. Indicators of Assessing the Effectiveness of the Accounting Information System
for Business Organizations.
Swanson, E.B., 2020. How information systems came to rule the world: Reflections on the information
systems field. The Information Society, pp.1-15.
Alathamneh, M., 2020. The impact of accounting information systems reliability on enhancing the
requirements of planning process at Jordanian commercial banks. Management Science
Letters.10(5). pp.1043-1050.
Diaz-Kope, L.M., Miller-Stevens, K. and Henley, T.J., 2019. An examination of dissertation research: The
relationship between gender, methodological approach, and research design. Journal of Public
Affairs Education. 25(1). pp.93-114.
Kumar, R., 2019. Research methodology: A step-by-step guide for beginners. Sage Publications Limited.
Gray, D.E., 2019. Doing research in the business world. Sage Publications Limited.
Quinlan, C. and et.al., 2019. Business research methods. South Western Cengage.
14