E-ACCOUNTING : A CONCEPT AND IMPLEMENTATION

PROF. PRIYANG D. RAVAL PROF. DHAVAL G. VYAS AROMA COLLEGE OF COMMERCE AHMEDABAD 380 015 Prepared under the Guidance of Dr. Maisuria Mahendra H.

Abstract
Just as internet has changed how we contact each other, it has also changed the business and with it accountancy is also changed by it. This paper very briefly talks about next generation accounting that is E-accounting. The concept is adopted world over by many companies, it has also provided new business opportunity to BPOs/ KOPs. E-accounting concept is adopted at international level. E-accounting helps businesses keep their financial data and accounting software in a safe, secured environment, allowing real time access to authorised users, irrespective of their location or computing platform. This paper is based on review of the literature about e-accounting and provides a brief outline about implementation of e-accounting. Taking, Tutis technologies Ltd, as service provider for the implementation of e-accounting for any company. Keywords Electronic accounting, networking technologies, service provider

INTRODUTION
In this age of fast growing information technology and internet connectivity almost all companies are connected by internet by one-way or the other. The introduction of the internet has revolutionized the process of business automation. Revolution is all about transformation for the good. In this competitive world of business, every business wants to be as cost effective as possible. The best way to reduce cost is to outsource non-core functions. Accounting is
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considered a non-core function for a business. E-Accounting is new development in field of accounting to help businesses to be more competitive. In an electronic accounting system, source documents and accounting records exist in digital form instead of on paper. E-Accounting might just be the beginning of a new era. There is no universally accepted definition of e-accounting yet because it is evolving concept. There are many meanings which can be used to understand what is e-accounting. In simple words, E-accounting merely refers to the changes in accounting due to computing and networking technologies. E-accounting involves performing regular accounting functions, accounting research and the accounting training and education through various computer based /internet based accounting tools such as digital tool kits, various internet resources, international web-based materials, institute and company databases which are internet based, web links, internet based accounting software and electronic financial spreadsheet tools to provide efficient decision making. E-Accounting or Online Accounting is new development in field of accounting. It means all your transactions will record in online server or data base, just like website or blog or web blog. But for opening or making accounts will uses login id and password. E-accounting is adopted by large number of companies around the world hence many accounting agencies are also favoring its adoption. The list of these agencies is very long, to name a few: The International Accounting Standards Board, The International Federation of Accountants, The UK's Financial Reporting Review Panel , The UK and Irish Auditing Practices Board , American Accounting Association (AAA) , Association of Chartered Certified Accountants , Foundation for Accounting Education. In e-accounting all major accounting relating to General ledger Book keeping and maintenance , Bank reconciliation MIS Cash management , Account Payable and Receivables , Billing Payroll , Budgeting Management of Records Asset , management Detailed financial analysis , Collection management , Credit management , Generation of financial reports Financial statements are totally online . Company's all accounting project can be easily outsourced by E-Accounting system.
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If we take the case study of: Tutis technologies Ltd, which is an e-accounting service provider company. It provides following information on its web site for its clients: Many organizations seriously consider outsourcing when they realize the need to consolidate and standardize different processes; a shortage of in-house expertise, technology and/or resources for accounting and other support functions; or the existing infrastructure that cannot accommodate anticipated growth. As accounting is considered non-core, many organisations opt for the BPO model. Besides the Accounting firms also find it time and money saving if they outsource the Book Keeping and Taxation to an Indian BPO with commensurate skill sets. Tutis Technologies Ltd has proprietary application -`Optidocs in-house Work Flow Application that will handle all processes and exception handling.
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From the above document flow chart we can easily understand that it becomes extremely easy for a client company to manage accounting if it adopts e-accounting. It can be used by accounting professionals like C.A. to cater the needs of a small or mid size company. Benefits of e-accounting: Some of the major benefits of e-accounting are as under. 1. Anywhere, anytime access of accounting information by authorized person, because it is on internet. No need of expensive in-house bookkeepers' expertise. No communication difficulties between the accountant and business owner because of work pressure. The accounting function receives attention only when a serious need arises. No wastage of time. The business organization can concentrate on the revenue side of business, and spends as little time as necessary on the accounting and payroll function. Online accounting through a web application is typically based on a simple monthly charge Zero-administration approach to help businesses concentrate on core activities. Avoid the hidden costs associated with traditional accounting software such as installation, upgrades, exchanging data files, backup and disaster recovery If anything happens to the company's computers, its documents are still safe on the web server. Timely, accurate financial and accounting information is vital for organizations hoping to maintain a niche over the competitors in the market. In a fast paced world, the clients need to have control over financial data to know their 24x7 financial positions, from any geographical location. How is this possible through e-accounting? E-accounting helps businesses keep their financial data and accounting software in a safe, secured environment, allowing real time access to authorised users, irrespective of their location or computing platform.

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Problems with e-accounting: There are several problems with adoption of e-accounting by any company, some of them are listed below. 1. Security of transactions (data) All the transactions (data) of the company is given to the service provider co. which is on a remote server, however, a company can take back up regularly. 2. Sharing of financial information of a company with the other (service provider) is a big mindset problem for traditional management. 3. Broadband connectivity and Speed If internet connectivity is down, work will be effected. Most of the currently available online office suites require a high broadband internet connection. 4. Lack of some features in the offline office suites, but they are progressively becoming available. 5. News about client information leaked by service provider is a big letdown for the progress of e-accounting adoption. 6. Lack of proper accounting standards are a big worry. Where information can be compromised and distributed, global firms need to be centpercent assured that their information is safe and are being safeguarded from identity theft. Conclusion: E-accounting is the application of online and internet technologies to the business accounting function. In e-accounting, source documents and accounting records exist in digital form instead of on paper. All major institution and organisation at national and international level are in the favor of e-accounting. From above discussion, it can be safely assumed that eaccounting is a next generation of accounting. It provides superior cost effectiveness to the adopting company, batter time management, transparency in accounting, Less possibility of Fraud, anywhere and anytime access of financial information are positives. But it is still in a

beginning stage in India because of lack of trust, government guidelines, internet connectivity at all places etc. E-accounting can only grow faster if some major problems faced by it is eliminated as early as possible.

References
Asian Journal of Finance and accountancy The Charted Accountant Dr. Patel J. K.: Adoption and impact of e-accounting Benita Gullkvist : adoption and impact of e-accouunting, Frontiers of e-business research 2003 www. Tutistech.com www.apaasp.com