Importance of Electronic Accounting System in Financial Sector

This report investigates the importance of electronic accounting systems within the financial sector. It begins by defining electronic accounting systems and explores their various types, including cloud and enterprise software. The literature review highlights the benefits, such as improved data security, time savings, and error reduction, while also addressing challenges like data theft, lack of management information, and delayed payments. The research employs a qualitative methodology, using an inductive research approach and interpretivism philosophy to analyze the significance of e-accounting systems. The report presents research questions and provides recommendations, such as cloud storage and ERP solutions, to overcome implementation challenges. The findings emphasize the critical role of electronic accounting systems in modern businesses, offering insights into their impact on financial performance and operational efficiency.

Accounting Reserach

Abstract
Electronic accounting system assist the company to secure the data in safe manner and
keep tracking the financial transaction of the company as well. In the same way, current study
will determine the importance of using this advance tool and system within a firm in order to
meet the define aim. The literature review clearly describe the importance of accounting system
within a firm and analyse that using this system will help the company to save time and present
the report without any error. Further, study also shows that there are different problem which is
face by the company in order to implement new system within a firm and this in turn affect the
overall results. Such that theft of data, loss of confidentiality, weak reporting service and lack of
management as well security. Also, using qualitative study methods, researcher is able to meet
the define aim and analyse the importance of using e-accounting system within a financial sector.

TABLE OF CONTENTS
Abstract............................................................................................................................................2
INTRODUCTION...........................................................................................................................1
LITERATURE REVIEW................................................................................................................2
Theme 1: Electronic accounting system......................................................................................2
Theme 2: Different type of electronic accounting system...........................................................2
Theme 3: Importance of e-accounting system for business.........................................................3
Theme 4: Problem facing by company to develop electronic accounting system.......................3
Theme 5: Ways to sort out the problem.......................................................................................4
RESEARCH QUETSIONS.............................................................................................................4
RESEARCH METHODOLOGY....................................................................................................4
DATA ANALYSIS.........................................................................................................................6
How electronic systems helps in decision making......................................................................6
DISCUSSION..................................................................................................................................8
CONCLUSION................................................................................................................................8
Recommendations........................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
In the era of digital technology, most of the company uses advance technology in order to
meet the define aim. In the same way, current study is also help to determine the importance of
using advance tool. The entire study will shed a light upon electronic accounting system which
offer a safe means of storing as well as assessing the data in order to run a business in better
manner. Therefore, accounting is the term which is used to determine the financial performance
of the company and analyse how the company manages the data in order to meet the define aim.
Now a days, most of the company uses advance accounting system such that BIS which help to
save time and perfection in work which is not possible in in the old system (manually).
That is why, through this current report, researcher wants to create awareness of using
electronic accounting system that assist to monitor the financial performance and transaction. As
most of the company uses advance technique and accounting software in order to calculate all
necessary calculation and keep the broad details of clients as well. But in the same time,
company also faces many problem such that losing confidentiality and many more. So, through
the present study, researcher uses secondary data collection method in order to examine the
importance of using electronic accounting system to generate the best results in the literature
review section. Also, through this topic, researcher create awareness among large business so
that they will also start implementing the system which in turn assist to take a business at further
level of success as well.
Purpose: The purpose of this research study is to let people understand about the
importance of using Electronic Accounting system.
Aim: The aim of this research report is “To investigate the importance of using electronic
accounting system within a financial sector”
Objectives:
 To determine the concept of electronic accounting system
 To analyse the importance of using e-accounting system within a firm.
 To identify the problems face by company while implementing e-accounting system.
 To recommend the ways through which the company overcome the challenges.
Research questions:
 What do you understand by the electronic accounting system?
 What is the importance of using e- accounting system?
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 What are the challenges which company faces while implementing electronic accounting
system?
 What are the ways through which the problems are minimized within a business?
LITERATURE REVIEW
Theme 1: Electronic accounting system
According to Khudir (2016) electronic accounting system are computerized software
program that helps a business to register online and smoothening the business operations as well.
Through e-accounting system, company is monitor all the activities of a firm which includes
financial performance as well. Such that handling bank accounts, bills as well as planning
schedule.
As per the view of Noori (2018) It is the computer based gadget that is completely based
on the information communication technology in order to capture and processing the business’s
financial data. So, it is a fast and complex reporting that provide invoices and automatically
updated the data into a computer system which help to save time and monitor performance.
Theme 2: Different type of electronic accounting system
In accordance with Fatima (2016) Cloud accounting software is a type of e-accounting
software where a company is comfortable with Xero, Sage 50 and different products for cloud
accounts. These type of software are available publicly and assist small entrepreneur to perform
the business account in better manner. On the other side, AL-Amro and et.al., (2017) stated that
Enterprise accounting software is another form of software which is used by large business as
well as financial institution. Basically, this software is used for sophisticated safety features and
also monitor client relationship. Thus, it can be stated that this two online software are actually
used by the company to track the financial transaction within a firm.
Swanson (2020) present their views that electronic accounting software are used by the
business for cloud accounting system such that Fresh books, which is suitable application for
graphic designers and smaller companies to monitor the selling process and provide quick
customer invoicing facilities to the customers as well. On contrary, Thanagamesh (2020) argued
that Tipalti is another cloud based accountable payable program which help to simplify the
payment system for end to end transaction. Such that this system is used at worldwide for
payable transfer and avoid the distributor’s large sums for yearly online bank payment. Thus, it
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can be stated that with the help of e-accounting system, company is easily manage the work and
it is essential for an organization’s effective management system as well.
Theme 3: Importance of e-accounting system for business
Electronic accounting system plays an important role in the business such that it help to
manage the money transfer and Yatsenko (2016) stated that though the system are complex to
handle but this is actually designed in order to handle all the monetary problem for a bug
business. Earlier, accounting system are perform manually and also, preserving account book
also took enough time, as a result, chances of error increases. That is why, to save from these
problem, there is a need to introduce e-accounting system. As per the Warren, Jonick and
Schneider (2020) accounting software is close enough t the local business because it help to save
time such that with the electronic accounting system, company is able to streamlined the entire
system and chances of error is also minimized.
In addition to this, it is also stated that through e- accounting system, error is minimized
which leads to perfection in work. If there is one error in the accounting which leads to generate
wrong results and that is why, installing this system will leads to ensure the consistency in a job
because there is no possibility of error. Also, Yashina (2020) supported that accounting programs
are become a critical requirement of every company whether it is a small business or large
company. The owner of the firm are also begun to suspect that handling the financial system in
perfect error is necessary because it assist to generate the exact outcomes and also help the
company to manage the expenditure in successful manner. 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 transaction in perfect manner without any delay.
Theme 4: Problem facing by company to develop electronic accounting system
Introducing e- accounting system within a firm also leads to generate different problem
such that Esmeray and Esmeray (2020) stated, theft of data is the biggest problem which the firm
is faces. It is so because copy the information stores in a machine and then send it to adversaries
is tough. Even with advance communication channel, the executives are submit one enterprise’s
private data to the next and this increases the chance of theft of data and increase cybercriminals
as well.
On the other side, Al-Obaidi (2020) also share their opinion that when a company
installed new e-accounting system, lack of management information is consider a problem. It is
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due to lack of using key performance indicator that preparation is rarely adequate and leads to
face many difficulties as well. In addition to this, delayed accountable payable is another
problem because when a company refuse to pay receipts on schedule which increase the risk to
receive late payment penalties and reduce the financial health. That is why, it directly increase
the weak reporting service and as a result, company’s customer relationship is got affected.
Theme 5: Ways to sort out the problem
If implementing e-accounting system has a problem, then it also have a solution. As per
the Swanson (2020) storage in cloud is the best solution which can be used by the company, it is
a web based reporting system which save the maximum number of document in a safe location.
Through this system, company easily manage the documents and it filtering with customer
search filtering from a single platform that improve organizational efficiency. On the other side,
Alathamneh (2020) consider a multifunction ERP is another solution which help to sort out the
problem, that integrating financial functionality with data analysis software. Further, this solution
also assist to take to modelling and instead of planning for liquidity problems and that is why
ERPs is the best method which help to resemble a machine in order to monitor the financial
performance of the firm.
RESEARCH QUETSIONS
 What do you understand by the electronic accounting system?
 What is the importance of using e- accounting system?
 What are the challenges which company faces while implementing electronic accounting
system?
 What are the ways through which the problems are minimized within a business?
RESEARCH METHODOLOGY
Research methodology is specific procedure and a technique which is used to determine,
select and analyse the information related to topic. There are different key element of the
research methodology section that help to conduct the research in better manner.
Research type: Generally, there are three types of research types such that qualitative,
quantitative and mixed. 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). That is why, using this method, researcher is able to
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meet the define aim and by collecting non- numerical data, researcher interpret the data that
helps to accomplish the define goals of a research.
Research Approach: Another key element which is a plan and procedure which consist
of broad assumption to detailed method of data collection, analysis. Hence, through this
researcher address the problem which is based upon nature. There are three types of research
approach, deductive, inductive and Abductive (Kumar, 2019). Among all, researcher uses
Inductive research approach which help to apply the theory and start with the observation. That
is why, using this methodology, researcher easily determine the importance of electronic
accounting system for the company and also analyse the pattern in order to reach conclusion.
Research Philosophy: It is a notion through which researcher is gathered, analysed and
used the data in order to meet the define aim. There are four types of research philosophy such
that Interpretivism, Realism, Positivism and Pragmatism. Among all there, researcher uses
Interpretivism research philosophy that help to interpret the data and it is also integrate the
human interest into a study (Gray, 2019). Also, through this philosophy, researcher conduct the
research in more precise manner and answer the research question i.e. importance of electronic
accounting system.
Data Collection: Data collection is the method through which researcher collect the
information, analysed and interpret the same. There are two types of data collection method such
that primary, in which research collect the information by their own and it is known as first
handed research through survey, questionnaire, observation etc. Next is secondary data collection
which is already conducted by others and researcher collect the information through books,
journals and magazines. Between these, secondary data collection method has been adopted by
the researcher in which relevant books, articles and Journals are selected which are published in
last 5 years, so that it will help to determine the importance of e- accounting system in the
company.
Data Analysis: It is the process of cleaning, transforming and modelling the data in order
to generate the best information that help to make better decision. Further, there are two types of
data analysis method such that qualitative and quantitative. Between these, qualitative data
analysis has been adopted by the researcher in order to generate the best results and also
accomplish the define aim and objectives as well (Quinlan and et.al., 2019). Further, through this
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data analysis method, researcher easily determine that e- accounting methods are beneficial for
the company or else, it affect the entire system by using secondary research methods.
Research limitation: During the research, scholar analysed that researcher face issue
such that not having enough time for conducting the research is consider one of the biggest
limitation. This in turn affect the results of a research in negative manner. Or else, most of the
sites are access denied and this also took enough time to select the best article that do not affect
the outcome in negative manner.
Validity and Reliability: Reliability and validity of the research is depend upon the
method which are selected by the researcher. In the current study, researcher also chooses the
best article and journals which are published within last 5 years, so with the help of these books,
article, researcher also meet the define aim and objectives, conclude the results as well.
DATA ANALYSIS
How electronic systems helps in decision making.
Decision making is one of the most important part in business. Along with the time and
growth of digitalisation process of decision making has also changed. Invent of digitalisation has
facilitated the decision making systems to a great extent. There are now various electronic
systems that are used by the company in decision making. With the help of these electronic
systems companies are able to conduct meeting without the physical presence of the members to
meeting they could be present virtually for the discussion of the topic and making effective
decisions.
Electronic meeting system is software that is established to provoke decision making and
problem solving in a group. Features of the electronic systems have facilitated online meetings.
These are referred as e-meetings taking place online. EMS has provided the platform for
facilitating the e-meetings that facilitates greater participation of the members that are away from
the place of meeting. It has helped the organisations to conduct meeting for taking important
decisions immediately without waiting for the members to gather at one place for discussing the
business of meeting. It also saves cost of conducting 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 company
can make discussion of its new products for testing the appeal among the employee having
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background and knowledge in proposed offerings. Employees and members could share their
opinions and reducing the criticism of potential conflicts.
Management Information is an another electronic system that consists of software and
hardware which serves as backbone of organisational operations. companies are using it for
gathering data and information from the multiple systems online, for analysis of the information
and report data for helping the management in decision making. This has helped the organisation
in making more accurate decisions by providing the updated and accurate data over variety of
company assets such as inventory, personnel, financials and real estate. This has enabled the
firms to collect data from number of sources at one place and make them accessible to the
managers for analysing the data running the reports. Using such system companies has become
very effective in making decision making process. The data available with the companies are
much accurate and timely that enables them in making reliable decisions. This is a centralised
system that enables the management to access the information from anywhere in the world with
the use of internet services. The availability of data makes it possible for the managers to access
data for making any informed decision for company without making any delay. It could be
analysed that there are various ways of improving the operations of company. For example it
enables the company in making decisions by making comparison about the sales for boosting the
revenues.
Electronic systems have reached far high levels for making sound decisions. Decision
Support System is an computerised program that are used by most of the companies nowadays
for supporting determinations, courses of action and judgements for decision making in the
organisations. DSS sifts through & analyses large data, compiles comprehensive information that
is used for solving problems and decision making. It has enabled firms to collect data from
various sources and making analysis of the information. Managers synthesises data for producing
more comprehensive reports. It as informational application differs from the ordinary operation
application that has the function of only collecting data.
Companies are using DSS systems as per their own requirement as it could be fully
computerised or can be powered by human. Ideal DSS system analyses the information collected
related to the area for which decision is to be made and makes decision after analysing the data.
This has enabled the users in making decisions at faster pace (Bledzhyants and et.al., 2019). This
has facilitated the managers in evaluating the data about various operations of the business on the
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basis of information collected from various sources. The outcomes of the DSS give the managers
the analysis about 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
analyse the data for making much reliable and informed decisions.
DISCUSSION
Through the secondary research it is analysed that in the modern era, every company
needs to change its existing business operation so that it will help to meet the define aim and take
a business at further level of success. In the same way for accounting sector, there is a need to
use e- accounting system within a firm so that it will 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 perform work online without any error, while through manual system, there is lots of
error which in turn affect the results and consumes time as well. On the other side, through data
analysis section it is also analysed that e-accounting system is consider one of the most effective
method that help to handle all the monetary problem in a big business. This is also supported by
Khudir (2016) that this system included many online software system which in turn help
company to effectively leverage the tools of their finance division so that chances of error is
minimized.
In addition to this, it is also analysed that electronic accounting system hold massive
records and it is also useful for local business that assist a person to save time and perfection in
work. Such that this help in the financial planning which means that it help the corporation
control their expenditure in better manner so that the company take a further level of success as
well. But in the other side, data analysis section clearly state that there are many companies in
the world who uses this advance tool in their business in order to smooth functioning of a
business such that it uses DSS system which help a firm to save time, but they do not know these
online system also affect the functioning of the company.
CONCLUSION
In the end it is concluded that the use of technology within the accounting is very
essential and this is because of the reason that when the technology is used the result are more
accurate and better. For the success of the company the use of accounting is necessary as the
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accounting only help the company in assessing the fact that whether the company has attained
high level of profits or not. If not then the technology will help the company in assessing the
areas in which the company need 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 company. Also, this accounting system electronically helps the company
reviewing and overseeing the performance and success of the company in more effective and
efficient manner.
The current research majorly focused over the electronic system that is the study of the
computerised software in order to use for the managing of accounts and related information.
Also, with the help of the research it was highlighted that there are many different types of
electronic system which could be used by the company like Xero, Sage 50, Enterprise accounting
software and many other different types of software can be used by the company. With the
completion of the research it was seen that the use of electronic system is useful for the company
as this help company in accurately assessing and review all the accounting and financial
information for the effective decision making. But with the analysis of the theory and facts and
figures it was seen that also there are many different challenges being encountered by the
company at time of using the electronic accounting system like lack of management information
system, resources and many others.
Recommendations
From the above all discussion it is clear that there is requirement for the company to
upgrade its electronic accounting system. Thus some of the recommendation to the company is
as follows-
The first and foremost suggestion for better use of electronic accounting system is to train
and educate the employees who are using these systems. This is basically because of the reason
that there are many frequent changes and up gradation within the technology and this need to be
adapted by the employees as well. Thus, providing timely training is the best way of suing the
latest technology within the company. Also, there are many new additions within the existing
technology so it is also the duty of the company to continuously research within the business
environment that which new technology or another version of existing technology has come.
This will help the company in using the latest technology so that the company will perform in
better manner.
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