Automation of Accounting Assignment Sample

Entity Activity Tracking for Payroll Automation

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Section 1

Entity-Activity Table

Table 1: Entity-Activity Table based on payroll processing system

(Source: Created by the learner)

Context diagram

In the above picture, a relationship between different entities is shown with the help of the outlines. This context diagram successfully clarifies the interactions between the system with the management and the employees in the process of the payroll processing system.

Level 0 DFD

In the above diagram, the basic overview of the payroll processing system is modeled with the help of draw.io application. In this diagram, the basic relationship between the entities which are associated with the payroll processing system is shown.

Section 2

Introduction

In recent years, the evolution of technology makes modern society digitalized. It is obvious that the digitalization of society has a great impact on the business world. Now it is necessary to take steps to developing the industry from all aspects. The traditional way of performing the task which is associated with the management of industry becomes time taking and sometimes it evaluates the fault result. This problem is going to increase day by day in the account section of the industry. It is extremely necessary to develop an automation system for accounting. In this report, the development of the automation system for an IT company is discussed. This report also consists of the threats which are related to the automation of the accounting of the IT industry. Also, the future opportunity and the necessary improvements which are required are discussed here in detail.

Threats to automation accounting

When an automatic process will develop for analyzing accounting in the IT industry, it is obvious that there will be several threats associated with automation. In this section, the risks which are associated with automated accounting are discussed in this section.

The first treat comes with the software application which will be used for the process of automation of the accounting. In today’s market, several computer software is available for making the accounting process automatic. But the problem starts with their price. The accounting software is very expensive. With the increase of several features, the software becomes bulky in size (Gotthardt et al. 2020). Also sometimes navigation of some programs becomes challenging for the new user. However, the software-making industry has some plans which are based on the requirement of the consumer.

The second problem is that for computing the accounting automatically, it is required to train all the employees who will use the application. As the size of the software is large as well as the initial process for automation is not very easy, the time taken for training varies from employee to employee. It is obvious that the employees take time to adapt to the new technology for accounting. That's why initially implementing the automated accounting process is a slow process (Moll and Yigitbasioglu, 2019).

The next threat associated with automated accounting is the technical problem. As automated accounting fully depends on the computer’s operating system, the software, internet connection, etc, if there is a problem in this element the whole process will be stopped. As long as the problem will remain unsolved, the automated accounting process will be facing difficulties in completing the required tasks (Fernandez and Aman, 2018). Though there is such type of inbuilt system that if there is a technical glitch arises, the system can address that fault. So that the problem can solve quickly. In some cases for solving the technical issue IT support is necessary. But if due to some technical glitch, the servers of the software go down and restrict access to the database. This situation can create problems when the task time limit comes close.

Sometimes it is possible that the software cannot detect the database appropriately which can be a risk for using the automation software. It will be counted as a threat when the database is not scanned properly or skipped some of the parts of the database can give the wrong accounting for a long analysis (Akimova et al. 2018). In this way, a newly migrated database can be a discrepancy.

For automated accounting software, if an error arises in the software, sometimes the software does not the error and computes all the analysis. So the result becomes less accurate. In this way, a large problem can occur in a large result database. It is impossible to detect the problem from the newly created large database. In this case, the automated accounting process may create a violation of the law which can cause a fine of a large amount of money. As accounting is made on the financial data of the industry, sometimes the wrong calculation can cause the risk of financial loss.

Finally, the last threat is poor financial reports. As the accounting process is made by some automatic technology, new ideas for improving the financial condition are not possible. As the report is created by computing technology, it is not accurate up to the level that is required for the analysis by the researchers. This poorly made report can damage the reputation of the company in the future.

The opportunity offered by automation accounting

In the digitalized business world, conventional accounting needs to upgrade in this modern world. There was a need for such type of technology that can analyze accounting better than the human brain. That’s why an automatic accounting process is developed. Automatic accounting is a machine-based technology, hence there are several opportunities associated with it. In this section, all the opportunities which are associated with automation accounting are discussed here (Schmitz and Leoni, 2019).

This accounting process can give solutions in a very short time. In a conventional way, the analysis can take even several days or months for an accountant. Through this automated accounting process, the accountant can solve any financial process with very less effort. This process is a time-saving process. The results can be developed very quickly and more accurately. Now through this process, the accounting team can handle more clients in a very short time. So this process is very effective for expanding the market share of the IT industry.

The financial database is very large to handle. One minor error can make a big financial loss for the industry. For overcoming this type of problem, automation technology can be proven very significant. The software which is used for automated accounting helps for identifying the wrong data which is placed by mistake. If the misplaced number can be a decimal value, also be identified by the application easily. This is very helpful for maintaining data accuracy. As it is very important for the financial operation (Byrnes et al. 2018). So at the last, it can be said that automated accounting reduces computing errors which helps to increase accuracy significantly that is very important for increasing the reputation of the company.

Accounting is a very long time process; hence it requires manpower and time to build an accurate financial report. So it is obvious that by the conventional process the cost of accounting is increased. Through the automated accounting process the cost of accounting is saved effectively. Through the automated process, the reports can be made in a very small time, the industry saves a lot of money (Lacurezeanu et al. 2020). So a large amount of money is not required to invest in a large accounting team to maintain the financial activity.

The accounting process is done by an automated process. So for the accountant, it becomes easier to analyze the financial reports. The analysis helps to track the current trends, fraud identification, and many other parameters that are important for improving financial strength. The automation process makes the data collection as well as the compilation easier than ever.

In the manual accounting process, all the accounting process is done through paperwork such as large records books. So there is a big chance to lose that paper may be by a disaster or accident. In such cases, it is not possible to get back those documents as always it is not possible to keep a backup from before. In such cases, automated accounting gives the opportunity to keep all the data on the cloud. All the works are a paper-free process that helps to save trees and also makes the desk clean.

In this digitalized accounting process, all the files are saved either in storage devices, on-premises data centers, or on the cloud. In the traditional process, if any file from 10 years before is required, one team has to search for that paperwork from a bundle of files which is a time-consuming process. But apart from this tedious way of searching, in the case of an automated accounting process, any file from any time can be retrieved within seconds or minutes (Cooper et al. 2019). By searching the file or group or any other tags the document can be downloaded very easily, quickly, and accurately with the automated accounting system.

Improvement for automated accounting

With time, the traditional accounting process is developed into an automated process. The automated accounting process is a very new technology for the industry as well as the employee. There are many factors that should improve automated accounting. In this section, the parameters are discussed which are required for improvement of the automated accounting. The whole technology is very new for the employee in the IT industry (Zhang et al. 2020). So training is required for implementing the automated process. The main problem that arises at the time of training is that the age of the employees is not the same. So, the same type of training cannot be beneficial for everyone. Young employees can adapt the new technology very quickly. But the old age employee’s special training should be required.

However, the process of the training can be slow but when all the employees adapt to the new technology, the accounting will be improved and boosted.

References

• Akimova, L.M., Osadcha, O.V. and Akimov, ?.?., 2018. Improving accounting management via benchmarking technology. Financial and credit activity problems of theory and practice, 1(24), pp.64-70.
• Byrnes, P.E., Al-Awadhi, A., Gullvist, B., Brown-Liburd, H., Teeter, R., Warren, J.D. and Vasarhelyi, M., 2018. Evolution of Auditing: From the Traditional Approach to the Future Audit1. In Continuous auditing. Emerald Publishing Limited.
• Cooper, L.A., Holderness Jr, D.K., Sorensen, T.L. and Wood, D.A., 2019. Robotic process automation in public accounting. Accounting Horizons, 33(4), pp.15-35.
• Fernandez, D. and Aman, A., 2018. Impacts of robotic process automation on global accounting services. Asian Journal of Accounting and Governance, 9(1), pp.127-140.
• Gotthardt, M., Koivulaakso, D., Paksoy, O., Saramo, C., Martikainen, M. and Lehner, O., 2020. Current state and challenges in the implementation of smart robotic process automation in accounting and auditing. ACRN Journal of Finance and Risk Perspectives.
• Lacurezeanu, R., Tiron-Tudor, A. and Bresfelean, V.P., 2020. Robotic process automation in audit and accounting. Audit Financiar, 18(4), pp.752-770.
• Moll, J. and Yigitbasioglu, O., 2019. The role of internet-related technologies in shaping the work of accountants: New directions for accounting research. The British Accounting Review, 51(6), p.100833.
• Schmitz, J. and Leoni, G., 2019. Accounting and auditing at the time of blockchain technology: a research agenda. Australian Accounting Review, 29(2), pp.331-342.
• Zhang, Y., Xiong, F., Xie, Y., Fan, X. and Gu, H., 2020. The impact of artificial intelligence and blockchain on the accounting profession. Ieee Access, 8, pp.110461-110477.