Running head: Computerized Accounting Systems

COMPUTERIZED ACCOUNTING SYSTEMS

Computerized Accounting Systems

Table of Contents

Introduction ................................................................................................................................ 3

Reason for SME still consider cash register as a preferred choice in managing check-out

processes .................................................................................................................................... 3

Contributions of POS system ..................................................................................................... 5

Accounting ............................................................................................................................. 5

Business operations and performance .................................................................................... 7

Conclusion ................................................................................................................................. 9

References ................................................................................................................................ 10

2
Computerized Accounting Systems

Introduction

This essay is based on point of services and its usage in small medium enterprises. It

has also explored the contribution of point of services in the field of accounting in any

specific organization. It has elaborated the impact of point of service on the operations that

have been performed in an organization as well as impact on its performance. This essay has

also discussed about the reasons of small medium enterprises using cash registers for

maintaining their check out processes. It has also provided relevant justifications of SME’s

choosing cash registers in spite of using modern methodologies for their processes.

Reason for SME still consider cash register as a preferred choice in

managing check-out processes

In any specific organization that is small to medium or even newly established

enterprises tend to use a regular cash register instead of a point of service system. Mostly this

is because the initial investment that is required in this is very low. This system also helps in

maintaining the regular activities of an organization in simplest way possible. A normal cash

register does not require any sort of special talent or training in order to use it. It can be used

by any individual with a basic knowledge in accounting (Fritscher, 2015). So an organization

does not need to invest any of its capitations on training individual for them.

An organization that is small scale does not have enough capitation and resources

required for a proper execution of an activity. As a result it tries to save as much of its

investments as possible. Cash registers are inexpensive and allows for simplicity in the

business. One of the advantages is that it is fail safe and there is not fear of losing Internet

connection like in PoS systems (Cnbc.com, 2019). Besides having less cost it also helps in

tracking customers transactions (Hurley, 2015). This feature helps in speeding up the time

3
Computerized Accounting Systems

that is required to checkout a certain transaction. This results in faster executions of each task

and saves a lot of time for an organization.

Cash registers even cheap ones have most of the features that is generally required for

an organization. It consists of the register, cash drawer and a barcode scanner for item

scanning. At the same time, it is much simpler than PoS system and is easy for the employees

to use (Businessinsider.com, 2018). A majority of them have high end functions such as

recording of sales. This feature helps an accountant to keep all relevant data regarding an

organization's transactions. Recorded data of transactions can be used in future for reference

by any superiors or during an internal auditing. Furthermore, it is able to calculate the change

that had occurred during a transaction (Laudon, 2016). This feature helps in over viewing the

changes that has been occurring in their business. They can take further security measures

that will help them improve their performance according to its results.

In some cases a cash register also comes with the software that is required for

allocation accurate sales taxes on every product according to their necessity. These features

are beneficial for smaller businesses that do not have large capital inflow and limited number

of customers to handle (Hillary, 2017). They can be used in a wide range of applications to

register their cash inflow and outflow. Each authorized personnel has their own set of

password and verification ID. These can be used to get access to various applications of a

cash register and also ensure security of customer and financial data.

It is mostly used by organizations that do not require added management department

that would be required in a usual point of service system. A cash register does not require

any supplementary management capabilities to maintain them properly. It is easy to use and

do not depend on network connectivity for continuous operations (Forbes.com, 2018). It is

vital for smaller businesses as they would not want to lose customers due to billing faux pas.

4
Computerized Accounting Systems

They can be used in any given situations and could be referred from at any given time.

Although there are various other systems that can be used, SMEs tend to use them mostly

because of their affordability (Kurniawati, 2016). However they have their own set of

disadvantages like it may not fit into the business model. For instance, small scale financial

firms have to rely on PoS systems for payment collection and payment disbursements.

Contributions of POS system

Accounting

Efficient running of a retail business is based on a positive maintenance of point of

sale system. It helps in staff members of an organization in manually entering transactional

details of their customers in their respective database (Nwatu, 2017). Usage of POS system

not only maintains payments and sales records but is also helpful in many other ways. Most

of the PoS systems are loaded with features that records customer preference and provide the

firm with excellent data for analysis (Forbes.com, 2018). It is helpful in efficient management

of inventory by showing required notifications regarding items that are being sold or not sold

in a retail business. Business owners can maintain sufficient stock of required goods that are

being sold in huge quantities based on preference by their customers.

Forecasting of profitability of an enterprise can be easily achieved by analyzing

economic profit lines that can be used under a business organization. It can help in

maintaining positive generation of revenue based on increased amount of sales of goods and

services (Laudon, 2016). PoS systems are built with additional tools for effective accounting

functions and processes that are used by firms to analyze their growth and generate sales

reports (Businessinsider.com, 2018). Therefore, it achieves the task of various tools under a

single service banner. It helps in keeping up with recent changes in trends regarding goods

5
Computerized Accounting Systems

and services that are needed to be provided to consumers. POS system helps in the

development of mobile catalogue that enhances selling activities under face to face method

by staff members.

Introduction of POS in under various mobile applications and software helps staff and

employees of a business in presenting their customers with required catalogues of products.

It helps in saving of both time and money as a customer can get a wide range of choices

based on their estimated budget. The biggest advantage to accounting that is contributed by

PoS is in its accuracy that is lacking in cash registers (Forbes.com, 2018). Due to this ability,

accountants do not have to double check every time there is a transaction. Furthermore,

receipt of payment can be easily transferred directly to a customer by the help of integrated

accounting software in POS.

Usage of POS helps in providing required information to staff and employees

regarding new products that are being arranged in business for selling purpose. It helps in

developing a sense of confidence and responsibility among employees regarding face to face

dealings with customers (Slawsky, 2017). It helps in making a significant improvement in

revenue generation of a business providing positive satisfaction to its consumers.

Furthermore, employees that are giving extra effort in making sale of extra unit of a good can

be easily traced under POS system. It can help them in getting additional incentives and

bonus based on their performance.

It should be kept in mind by an organization that no customer will ever share their

personal details in their POS software. However, their confidence can be gained by hiding

app selection screen and presenting a staff member's mobile or tablet as a single purpose sales

device (Smirat, 2016). It is another advantage of PoS systems which ensures that customer

data is secured and at the same time used by the firm for better data analysis. With systematic

6
Computerized Accounting Systems

SSL encryption, it is designed for safe money transaction (Nwatu, 2017). It can help in safe

encryption of customer’s bank related data and can help maintain their trust regarding digital

payments made by them to an organization.

Management of inventory can be done based on products that are preferred on a large

basis by customers. Products of low quality and preference can be easily avoided and its

stock can be replaced by useful products (Bradford, 2015). Maintenance of products can be

easily maintained based on its requirements during a particular season and price range. There

is a positive maintenance of demand and supply of products that are provided to customers

based on their requirements. Both time and money are efficiently utilized by a business

based on maintenance of sufficient quantity of goods and products for their consumers. As a

result, positive performance of a business in maintained in its consumer industry by efficient

usage of POS system.

Business operations and performance

POS with its high flexibility and intelligent approach to accounting has made the

work of accountants easier. It has played a major role in revolutionizing business operations

and performance. It helps in maintaining all the data related to their organizational

transactional at a single place (Fritscher, 2015). They can be used to store various data related

to an item like the required tax on them or its discount. With proper data analysis tools and

services, the employees find it easy to use customer information, thereby, utilizing the Client

relationship management services of the PoS tool (Forbes.com, 2018). It can also be used to

store various other data regarding details of a transaction. These details can be used in future

for their reference in case of some unfortunate situation.

POS uses a seamless structure that can be used in any environment that is necessary

for its user. It can be used from a mobile phone or a computer that is connected to a register

7
Computerized Accounting Systems

server (Hillary, 2017). Thereby, it renders an easy and simple way for potable money

transaction for sales people who have to visit locations for sales. It saves the given data in

cloud that can be accessed by a certain authorized person. It has an interface that is easily

understandable and can be used by a person with a set of management skills. At the same

time, PoS systems are allowing economies to be independent of paper currency that also

saves trees (Forbes.com, 2018). Customers are highly benefited from digitization of banking

sectors. Accordingly, they use credit and debit cards instead of making cash transactions.

POS is advantageous due to its mobile portal functioning. It can be operated over

mobiles across all modes of networks. Mobile portal POS allows customers to complete any

transaction quickly and suitably. This also helps sellers to accept any card payments from

POS with smooth mobile portal (Hurley, 2015). This allows customers to have autonomy

over all modes of transaction with sound networking facility across globe. This also saves

costing of businesses as no physical involvement is required for accepting transactions over

POS.

There is no requirement for training employees for accepting transaction over mobile

through POS. This mode is very simple to be used as it requires customers to have card

identifier in their mobiles which would scan respective cards and continue transaction process

(Kurniawati, 2016). Innovative POS transactions combine financial transaction with customer

management solutions to improve business over a short period of time. Detailed receipts are

generated foe both sellers and customers that can be used for future reference and allow both

parties to keep a track of their transaction records (Hillary, 2017). It enables any business to

identify customers having huge effect on sales throughout the year and loyalty of those

customers is also identified.

8
Computerized Accounting Systems

There are various POS modes which acquire information from tills of previous

transactions about related customers (Laudon, 2016). These modes are applicable on iPods

which chalks out histories of customers like their purchasing tastes, addresses and names.

This enables businesses to keep track records of customers and reach them with their latest

products and offers. Therefore, it can be inferred that new POS system enables business to

draw smarter business methods to earn more revenue at low cost.

POS can also be used along with IoT that will connect regular items to access the data

that are required for a transaction. This is a step towards digitization and allows integrating

technology with payment transactions. These make it possible for an organization to connect

their front and back end processes (Nwatu, 2017). For example a credit can be used during a

transaction that consists of customer bank details required for a transaction. IoT services

installed in mobile phones would act as PoS machines and make transaction easier.

Conclusion

It can be concluded in this essay that POS can be widely used in organizations of

various industries. It has revolutionized the organizational accounting sector to a technology

oriented work. It shows that POS plays an important role in accounting of an organization. It

has various features that can help an accountant to make their tasks simpler. It also has a

major impact on operations that are being conducted in a business. POS due to its seamless

and flexible nature a wide range of organizations have been using it. These show the reasons

for small medium enterprises to select regular cash register over these modern technologies.

9
Computerized Accounting Systems

References

Bradford, M. (2015). Modern ERP: select, implement, and use today's advanced business

systems. London: Lulu. com. Retrieved from:

https://books.google.co.in/books?hl=en&lr=&id=KZRqCAAAQBAJ&oi=fnd&pg=P

R17&dq=Bradford,+M.+(2015).+Modern+ERP:+select,+implement,+and+use+today

%27s+advanced+business+systems.+London:+Lulu.+com.&ots=G0rK92kkJz&sig=D

PK4U2q7I3-nt14LslwQUajz8ig

Businessinsider.com. (2018). Retrieved 2019, from How to choose a point-of-sale system for

your business: https://www.businessinsider.com/point-of-sale-system-features-2018-

3?IR=T

Cnbc.com. (2019). Retrieved 2019, from Coming soon: A world without cash:

https://www.cnbc.com/2019/03/07/coming-soon-a-world-without-cash.html

Forbes.com. (2018). Retrieved 2019, from Five Reasons Your POS May Be Your Best

Business Advisor: https://www.forbes.com/sites/forbestechcouncil/2018/11/06/five-

reasons-your-pos-may-be-your-best-business-advisor/#77db06196fae

Fritscher, B. &. (2015). Business IT alignment between business model and enterprise

architecture with a strategic perspective. International Journal of Information System

Modeling and Design , 1-23. Retrieved from:

https://pdfs.semanticscholar.org/4799/8f51ec534cf5863f8d9ef67157ad8aafef3f.pdf

Hillary, R. (2017). Small and medium-sized enterprises and the environment: business

imperatives. Abingdon: Routledge. Retrieved from:

https://www.taylorfrancis.com/books/9781351282840

10
Computerized Accounting Systems

Hurley, R. A. (2015). The Impact of Simulated Kraft Substrates on Consumer Attention at the

Point of Sale. Journal of Applied Packaging Research . Retrieved from:

http://scholarworks.rit.edu/cgi/viewcontent.cgi?article=1017&context=japr

Kurniawati, E. P. (2016). Effect analysis of the use of accounting information, managerial

performance and employee performance Towards SMEs. . Journal of Administrative

and Business Studies , 130-142. Retrieved from:

https://tafpublications.com/gip_content/paper/jabs-2.3.4.pdf

Laudon, K. C. (2016). Management information system. London: Pearson

Education.Retrieved from:

https://books.google.co.in/books?hl=en&lr=&id=4RAwDwAAQBAJ&oi=fnd&pg=P

P2&dq=Laudon,+K.+C.+(2016).+Management+information+system.+London:+Pears

on+Education.&ots=CEyTo4UnTn&sig=Y4J7ulCWe8LhQ4U5cL_MqjPcOP4

Nwatu, B. C. (2017). Predicting consumer adoption of point of sale (pos) e-payment system

in nigeria using extended technology acceptance model. British Journal of Marketing

Studies , 1-11.Retrieved from:

https://www.researchgate.net/profile/Titus_Okeke/publication/320555466_Predicting

_consumer_adoption_of_point_of_purchase_e-

payment_system_using_extended_technology_acceptance_model/links/59f82737aca2

72607e2da547/Predicting-consumer-adoption-of-point-of-purchase-e-payment-

system-using-extended-technology-acceptance-model.pdf

Prause, G. (2015). Sustainable business models and structures for Industry 4.0. . Journal of

Security & Sustainability Issues. Retrieved from:

http://www.lka.lt/download/36657/journal%20of%20security%20and%20sustainabilit

y%20issues%20nr.5_2%20internetui.pdf#page=37

11
Computerized Accounting Systems

Slawsky, J. &. (2017). Developing and managing a successful payment cards business.

Abingdon: Routledge. Retrieved from:

https://www.taylorfrancis.com/books/9781315258065

Smirat, A. L. (2016). Cash Management Practices and Financial Performance of Small and

Medium Enterprises (SMEs) in Jordan. Research Journal of Finance and Accounting

Retrieved from:

https://pdfs.semanticscholar.org/fe7a/274adf324443dc5c3d4f5850e16e48c6dedf.pdf

12