Background
The traditional accounting way of accounting involves manual recording of accounting, recording, and classifying of expenses in a company. The traditional accounting of recording transactions and classifying expenses start by recording the company daily transaction in the primary book of entry, which is the journal book. The next process involves classifying the above treatment then into its subsidiary books which is called the ledger accounting where accounting are transacted according to the respective accounting nature like the purchase books, cash account, bank account, sales account, debtors account and creditors account. The three golden rules of accounting binds the framework of accounting in the traditional accounting. The traditional way of accounting had some of its key strengths like the accurate and detailed information along with classification and breakdown of various components of the financial data and report. The traditional way of accounting is very useful in the small-scale enterprise, where the accounting transactions and the amount of transaction is usually of small size. The golden rules of accounting governs the traditional accounting concepts classifying each account to the various account type according to the accounting transactions involved in the same (Smith 2017).
The traditional accounting is criticized based on several factors and the way its uses to implement the way of accounting in recording and classifying the accounting treatment. The key weakness for the traditional approach of accounting is that the accounting may involve human error, which is not automatically identified and corrected as per the modern way of accounting. The approach is time consuming as the traditional accounting is a cyclical process which needs to be done on a step by a step basis and the same is time consuming. The approach is not suitable for medium and large-scale enterprises where the accounting transactions is usually large and the same cannot be handled by the traditional approach. Maintain records in the way of documentation can lead to mishandling and loss of document in the case of fire and theft. Thus, the traditional accounting has its own pros and cons and the usage and the application for the same differs (Maskell, Baggaley and Grasso 2016).
The traditional accounting used by the Walton brothers in the above case studies showed that the entity was not able to get the full backend support from the accounting department due to lack of inefficient and traditional use of accounting. The various ways and the options present to the Walton Brothers at present to bring efficiency in their back office accounts department is with modern accounting software’s, tools and techniques. The traditional accounting approach is not able to efficiently handle and utilize the financial data of the company because of the growth of the company in terms of business and revenue (Libby 2017). As identified in the case study the company is not able to handle all of the operations of the company and the recovery of accounts receivable is not efficient by the company. The company in this case can use the accounting software’s where the transactions of the companies will be represented in a chronological order and will help navigation into data and particular account and information more accurately. The classification of the financial data is done in a more accurate and time efficient process where the daily expenses incurred through banks and various financial data can be accumulated through different sources and the results for the same is generated in a single and chronological way (Warren, Moffitt and Byrnes 2015).
Requirements
The use of modern accounting software’s like MYOB and Xero will enhance the way of accounting in the entities and the recording and classifying the accounting treatment for the same. The use of these modern tools like MYOB software will provide the company efficiency and provide efficient services on taxes, accounting and other business and accounting services by the tools. The Xero Accounting tool will also help the company in the way of securing the financial and accounting data digitally and perform cloud-based services for the same by storage of accounting data in the data in the cloud-based services. The accounting services will also help overcome the company over the cash flow problem by giving a brief overview and an analysis for the same on areal time basis. The reconciliation of the business timely and efficiently will help the company run the business with on the go services, sending and payment of faster of online invoicing process. Thus, the Walton Brothers should adopt a more defined and broad way of accounting that is through use of modern accounting tools and software’s (Myrelid and Olhager 2015).
The strength for the particular accounting software and tool will be that the manual recording and reconciliation of financial data will get aloof. Thus, chances of human error and the analysis for the accounting transaction would be a lot easier for the company. The key weakness for the use of such accounting software’s and tools could be the cost implementation for the same and the risk of cybercrime should be the major concern for the company (Herasymovych 2018).
The cost to purchase and implementation of the same should be based on cost-benefit analysis for the company. There should be some of the key concern while implementation of the software that is will the accounting software involve extensive training and development, the data transformation and inputting process and the use and benefits are some of the key implications which the company should analyze (Mirzaey, Jamshidi and Hojatpour 2017).
The use of an accounting software differs from that of a traditional accounting in terms of speed and time consumption, the cost and the additional benefits that the software’s would provide. Backup and storage of data in an efficient and time efficient manner. The accurate information and the reconciliation of data according to the real time basis is one of the key important feature that the modern accounting software provides. Thus on a conclusion note it is essential and crucial to note that the accounting software will help ease and consistency in the accounting manner of the Walton Brother’s company which will help the company focus and emphasize more on the core operations of their business and grow sustainably in the long term (Wang and Do 2015).
Reference
Herasymovych, I., 2018. Accounting and Analytical Tools for Improving the Enterprise Business Processes. Accounting and Finance, (1), pp.34-38.
Libby, R., 2017. Accounting and human information processing. In The Routledge Companion to Behavioural Accounting Research (pp. 42-54). Routledge.
Maskell, B.H., Baggaley, B. and Grasso, L., 2016. Practical lean accounting: a proven system for measuring and managing the lean enterprise. Productivity Press.
Mirzaey, M., Jamshidi, M.B. and Hojatpour, Y., 2017. Applications of artificial neural networks in information system of management accounting. International Journal of Mechatronics, Electrical and Computer Technology, 7, pp.3523-3530.
Myrelid, A. and Olhager, J., 2015. Applying modern accounting techniques in complex manufacturing. Industrial Management & Data Systems, 115(3), pp.402-418.
Smith, M., 2017. Research methods in accounting. Sage.
Wang, S.L. and Do, T.X., 2015. Analysis of IT Impact of Using Accounting Information System in Vietnam. International Journal of Science and Engineering, 5(1), pp.111-116.
Warren Jr, J.D., Moffitt, K.C. and Byrnes, P., 2015. How Big Data will change accounting. Accounting Horizons, 29(2), pp.397-407.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
