Part 1: Computerizing Accounting Systems

You have recently been hired by a small gift shop, Carter's Unique Gifts, in your local tourist town. This shop has been around for 50 years, and the ownership has never changed. Due to the opening of additional parks and recreational activities, the population has doubled over the last year and the business is booming. The owner comes to you regarding computerizing the accounting system. To give him a comprehensive proposal, you need to provide the answers to the following questions:

• What are the advantages to his business of using a computerized system? Provide at least four advantages.

• Why is the computerized system superior to the manual system for his business? Give reasons.

• Which are the top two competing accounting software products that would work for a small business, and why?

• What are the challenges you foresee for this business in making a switch from a manual to a computerized system?

Part 2: Computerized Accounting Cycle

The bookkeeper for Carter's Unique Gifts has been using a manual accounting system for years. She has questions regarding the differences between the manual accounting cycle and the computerized accounting cycle. Prior to answering her questions, based on your research and understanding, answer the following questions for her:

• What steps have been added to the computerized accounting cycle that you do not need to perform in a manual system? Are there any other steps that you think should be added?

• What steps have been removed from the computerized accounting cycle that exists in the manual accounting cycle? Do you see any risks in removing the steps that you identified?

• During which step in the computerized accounting cycle do you think there are the most errors made? How do accountants figure out what these errors are so they can fix them?

• How do these errors in the computerized accounting cycle compare to the manual system of accounting?