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Click Here for List of Accounting Software for Various Business Segments
 One of HiTech Accounting Software
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Accounting and Business Management of all kinds of business, industry and
services is now possible with HiTech Accounting Software made for specific
business segments. Click the following links for more details and free 30
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have ready off the shelf Accounting
and business management software with inventory control
for following user segments. |
VAT Accounting
Accounting, Billing Inventory Control |
Business Houses
Accounting Software |
Traders
Billing and Accounting Software |
Industries
Industry Management Software |
Hospitals
Hospital Management Software |
Hotels
Hotel, Restaurant Billing and Accounting Software |
Automobile Dealers
Billing and Accounting Software |
Petrol Pumps
Billing and Accounting Software |
Pharmaceutical Dealers
Billing and Accounting Software |
Brokers
Billing and Accounting Software |
Newspaper Publishers
Billing and Accounting Software |
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Limitations of Financial Accounting
Advantages of accounting discussed
in this section do not suggest that accounting is free from limitations.
Following are the
limitations:
Financial accounting permits alternative treatments
Accounting is based on
concepts and it follows " generally accepted principles" but there exist more
than one principle for the treatment of any one item. This permits alternative
treatments with in the framework of generally accepted principles. For example,
the closing stock of a business may be valued by anyone of the following
methods: FIFO (First-in- First-out) ,LIFO (Last-in-First-out) ,Average
Price ,Standard Price etc., but the results are not
comparable.
Financial accounting is influenced by personal
judgments
'Convention of objectivity' is
respected in accounting but to record certain events estimates have to be made
which requires personal judgment. It is very difficult to expect accuracy in
future estimates and objectivity suffers. For example, in order to determine the
amount of depreciation to be charged every year for the use of fixed asset it is
required estimation and the income disclosed by accounting is not authoritative
but 'approximation'.
Financial accounting ignores important non-monetary
information
Financial accounting does not
consider those transactions of non- monetary in nature. For example, extent of
competition faced by the business, technical innovations possessed by the
business, loyalty and efficiency of the employees; changes in the value of money
etc. are the important matters in which management of the business is highly
interested but accounting is not tailored to take note of such matters. Thus any
user of financial information is, naturally, deprived of vital information which
is of non-monetary character. In modern times a good accounting software with
MIS and CRM can be most useful to overcome this
limitation partially.
Financial accounting does not provide timely
information
Financial accounting is designed to
supply information in the form of statements (Balance Sheet and Profit and Loss
Account) for a period normally one year. So the information is, at best, of
historical interest and only 'post-mortem' analysis of the past can be
conducted. The business requires timely information at frequent intervals to
enable the management to plan and take corrective action. For example, if a
business has budgeted that during the current year sales should be Rs. 12,00,000
then it requires information whether the sales in the first month of the year
amounted to Rs. 10,00,000 or less or more? Traditionally, financial accounting
is not supposed to supply information at shorter interval less
than one year. With the advent of computerized accounting now a software
like HiTech Financial Accounting displays monthly profit and loss account and
balance sheet to overcome this limitation.
Financial Accounting does not provide detailed
analysis
The information supplied by the
financial accounting is in reality aggregates of the financial transactions
during the course of the year. Of course, it enables to study the overall
results of the business the information is required regarding the cost, revenue
and profit of each product but financial accounting does not provide such
detailed information product- wise. For example, if business has earned a total
profit of say, Rs. 5,00,000 during the accounting year and it sells three
products namely petrol. diesel and mobile oil and wants to know profit earned by
each product Financial accounting is not likely to help him unless he uses a
computerized accounting system capable of handling such complex queries. Many
reports in a computer accounting software like HiTech Financial Accounting which
are explained with graphs and customized reports as per need of the business
overcome this limitation.
Financial Accounting does not disclose the present value of
the business
In financial accounting the
position of the business as on a particular date is shown by a statement known
as 'Balance Sheet'. In Balance Sheet the assets are shown on the basis of
"Continuing Entity Concept. Thus it is presumed that business has relatively
longer life and will continue to exist indefinitely, hence the asset values are
'going concern values.' The 'realized value' of each asset if sold to-day can't
be known by studying the balance sheet.
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