Scientific Journal WSFiP Nr 1/2016

10.19192/wsfip.sj1.2016.4

Wioletta WIEBODA*

ADVANTAGES AND DISADVANTAGES

OF FUNCTIONS OF FINANCIAL AND ACCOUNTING
SYSTEMS USED IN ACCOUNTANCY

Summary
The need of collecting information about business units grows together with economic
progress. Accounting is the source of this data without which no company would be
able to conduct business activity. The data is considered to be the business language
home and abroad, because it represents all the financial results by means of figures.
The financial and accounting systems are being progressively introduced together with
regulations aimed at making an accountant’s job easier. The systems available on the
market vary from very simple ones built upon Excel spreadsheets, more advanced
systems for small and medium sized enterprises developed by COMARCH-CDN
(OPTIMA), Matrix.pl (Symfonia@) or InsERT (Rewior), to the most complex such as
SAP, BAAN or IFS. As nowadays computers’ hard drives are used for keeping,
registering and evidencing financial record 1, tax declarations may be transferred
directly to appropriate tax offices without the need for an accountant to leave his or her
desk, and import and export of documents can be easily monitored. The electronic
systems allow easy and fast access to archival information, easy correction of
implemented data and offer a big amount of reminders and tips on how to deal with
mistakes in accounting documents.
Key words: financial accounting system, accounting records, data, financial reports

Introduction

Application of modern methods of recording accounts implies

significant advantages, which not only an accountancy department of an
enterprise can benefit from, but also the financial market and generally
the economy as a whole. Accounts are stored in computerised financial
and accounting systems because then they are available for every entity

*
Wioletta wieboda M.Sc., University of Economics in Katowice.
1
M. Andrzejewski, K. Jonas, P. Młodkowski, Computer financial and accounting
systems, Wydawnictwo PSB, Kraków 2000, p. 8.

63
Wioletta wieboda

including the budgetary institutions. Implementation of electronic

bookkeeping solutions improves storage of accounting records and the
registration process, it also offers an opportunity of significant savings.
Talking about improvements, in case of an incorrectly completed
financial document rewriting is necessary. Proof-reading takes a lot of
time because the same activity needs to be performed twice and close
attention must be paid not to make the same or other mistake. Electronic
solutions when applied for this purpose not only give a possibility to
correct the mistake immediately but also inform about occurrence of the
mistake in the very process of filling in. The electronic system provides
easier access to data, it searches through all accounting records and does
so according to many different criteria. Making balance sheets for
accounting reports is also more efficient. The system enables its users to
put elements together to create a whole and the other way round, i.e.
aggregation and disaggregation of the information creating reports such
as balance sheet, profit and loss account, cash flow report in a traditional
form requires long, precise and arduous work.
The aim of this paper is to present certain examples of advantages
and disadvantages resulting from using financial and accounting
programs, their possibilities, functions and usefulness.

1. Functions of financial and accounting systems

Financial and accounting system is designed to support work that is

performed in accounting departments. As in accordance with legal
regulations the enterprises are obliged to keep accounts, the application
of an electronic accounting system allows the users to execute the
following accountancy functions:
• informational,
• monitoring,
• analytical,
• stimulating,
• statistical.
The informational function is about providing information to a wide
circle of target audience. These are people employed in the company as
well as people from its surroundings. Thanks to computer systems
providing essential information remotely with any frequency and any
range of detail is possible. Electronic records enable the user to provide

64
 Advantages and disadvantages of functions of financial…

information with fewer mistakes. When balance sheets, reports and

statements are created by hand, they contain more mistakes. Small and
middle-sized companies are guided, first of all, by functioning within the
scope of tax reporting while choosing a suitable financial and accounting
system2. A monitoring function enables the user to protect the asset
against the theft because it requires specifying a person responsible for
particular elements of assets and liabilities and it monitors their
circulation.
The analytical function means financial analysis modules which are
needed to prepare business plans in order to submit the applications for
bank loans. Elements of financial reports are the source of data, essential
to make financial analysis. The system enables the individual to receive
and process them quickly and easily.
The stimulating function, also the so called management function,
directly concerns the process of allocation of resources which are in
possession of a given company and the usage of these resources. All
processes in a company can be monitored, revenues and expenses can be
controlled on a daily basis. One of the greatest advantages is the
possibility to receive management information without delays.
The last function which is dealt with is the statistical one.
Accountancy is a source of statistical information and that is why there
are certain requirements concerning data transferring to The Polish
Central Statistical Office3. Thanks to information technology collecting
such data does not take a long time and therefore data can be sent in
a comfortable, electronic form via e-mail.
Financial accounting systems consist of:
• general ledger,
• registrars,
• transfers,
• VAT purchase register.
The general ledger allows servicing all the documents that are in
a company. It allows servicing trade books. Thanks to this part of the
system keeping and archiving records for many years is possible. It is
also possible to work on a number of fiscal years simultaneously, without
a necessity to disconnect the access to the current fiscal year in order to

2
Tax returns PIT, CIT.
3
Reports F-01 and F-02.

65
Wioletta wieboda

work, e.g. on the previous one. The next element that allows for work in
more than one fiscal year is entering in the books relevant documents in
one or more periods at the same time. Those systems can be characterised
by easiness in copying and shifting of accounting documents. The
guidelines concerning the rules of automatic accounting for direct costs
and opening new sub-ledger accounts with the names of contracting
parties can be established. Such data is generated automatically after
entering accounting documents while they are being registered. The
function which is particularly appreciated by the users is correlation of
payments with invoices. It enables the user to remind the contracting
parties about the invoices which were not paid. Other capabilities are as
follows:
• making ready juxtapositions specified in the Accounting Act as an
essential requirement,
• pre-accounting of the documents, “to the buffer” and subsequently
when everything is verified correctly there is a possibility of final
accounting so called “to ledger” option.
Registrars combine registry with storing documents received by the
company. In this scope the system enables the individual to control
documents which are circulated, to record and to register them.
Transfers enable the user to create documents which are used e.g. for
the costs settlement, defining the relevant activities e.g. cost-share
programs and the function of generating documents automatically is also
possible by prior introduction of relevant functions or logarithms.
Vat purchase register service allows full management of sales and
purchase documents, import documents, intra-community acquisition and
intra-community shipment; it allows introducing registers, viewing
documents, checking the correction of the data entered. Thanks to this
service it is possible to enter net sums at the time of accounting a given
document, and the system will calculate the amount of VAT and gross
amount. It is important to verify those amounts because there might be
discrepancies resulting from rounding. It is also possible to create
declarations e.g. VAT-7 declaration4.
According to the law in force, the most important changes
concerning financial accounting systems are presented in Table 1.

4
http://rabbit.unisoft.com.pl/page.php?id=118&PHPSESSID=b7a054889695176741de6
d4dc764ccce., date: 20 November 2015.

66
 Advantages and disadvantages of functions of financial…

Table 1. Changes concerning IT systems

Specification Legal basis

Specifying requirements concerning Act of 29 September 1994 on
documentations of IT systems, their accounting (Journal of Laws 1994,
security and their credibility. No. 121, item 591, art. 71).
Abolishment of necessity of printing Act of 29 September 1994 on
account ledgers and logbooks. accounting (Journal of Laws 1994,
No. 121, item 591, art. 13 point 5).
Recognition of entries from IT Act of 29 September 1994 on
systems as accounting records. accounting (Journal of Laws 1994,
No. 121, item 5915, art. 20 point 5).
Source: The author’s own elaboration on the basis of: M. Andrzejewski, K. Jonas, P.
Młodkowski, Komputerowe systemy finansowo-ksi gowe, Wydawnictwo PSB, Kraków
2000, p. 17.

According to the law, an entity should also possess documents which

describe data processing system but if it keeps accounts electronically it
should also possess description of software which contains a list of
computer programs, procedures and functions depending on the structure
of the software. It appears that it may cause some complications in
practice because the Accounting Act does not provide technical
specification of the documentation that is required. It specifies only the
rules on the basis of which the system functions.
The legislator also claimed that if the accounts are kept with the use
of computers the proper procedures must be used along with protective
measures which are to prevent damage, modifications and hiding entries6.
This is a tip for the computer programmers not to create systems which
can be easily manipulated. The law also emphasises the need to make
copies of the sets of data on regular basis. Those statements function in
a general framework, allowing business entities freedom of choice. The
legislator abolishes the necessity of printing out the account books at the
end of each fiscal year, treating the record on data carrier as the same, on
condition that it will ensure durability of information storage for the

5
Act of 29 September 1994 on accounting Journal of Laws 1994, No. 121, item
591, art. 10 paragraph 1 point 3c.
6
Act of 29 September 1994 on accounting (Journal of Laws 1994, No. 121, item 121,
art. 23.

67
Wioletta wieboda

period of time that is not shorter than the time required for storing
account books7.
The last change which was introduced is the recognition of entries
and records in account books which were made by means of
communication equipment or data carriers as source evidence.8
Using financial and accounting systems which are in compliance
with legal requirements and act in accordance with them, can contribute
to more efficient co-operation between market participants, e.g. bank
supervisory authority, the Inland Revenue etc. The most important factor
is the fact that all the software is legal 9.

2. Advantages and disadvantages of financial and accounting

systems

Storing data in an electronic form is durable, safe and the risk of

damage is minimal. The data is easy to copy which can be both
disadvantage and advantage because documents may get into
unauthorised hands easily and quickly. This way of storing accounting
records is definitely cheaper than the traditional one, in which paper,
consumables, area, etc. are needed. The next aspect which is an
advantage is the number of people needed to keep accounts in a computer
system. Not many staff is necessary for this work. As a result, the salary
expenses in companies are considerably decreased. On the other hand, to
be able to take an advantage of such an option fully the following is
necessary: a licence, computer hardware as well as trained staff.
However, the investment in the above is a good investment for the future.
Keeping accounting documents and information safe generates extra
costs. This is connected with protection of the data carrier where the
backups are recorded and updating the system which results from the
amendments of law. Incorporating the practices mentioned above is
important and profitable also from the point of view of financial markets.
Thanks to modern solutions, the creditors and investors receive
information, concerning the company, its functioning, estate condition,
achieved results and the risk, with just a small time delay. Such an action

7
Ibid. art. 13.
8
Ibid., art. 20 p. 5.
9
The author’s own elaboration on the basis of: M. Andrzejewski, K. Jonas, P.
Młodkowski, Komputerowe systemy finansowo-ksi gowe, Wydawnictwo PSB, Kraków
2000.

68
 Advantages and disadvantages of functions of financial…

results in the possibility of effective action on financial markets and

allocation of wealth resources possessed. Bank and tax inspection
authorities administer and make an audit not only on the basis of
information which reaches them but also via on site inspections in
companies concerned. In enterprises that use computer systems for
accounting, the representatives of the institutions mentioned above do not
have to sacrifice a lot of time and effort. After the audit is completed the
company is asked to make a printout of the ledger and relevant sub-
ledgers and to present relevant accounting documents10.
Electronic systems supporting the work of accountants are becoming
more and more popular. They are indispensible when there is a need to
keep accounts in the form of revenue and expense ledger and/ or for VAT
payers. The larger number of documents, the larger amounts of savings
are generated. The contracting party data is entered only once and the
system remembers it automatically. There is also a possibility of finding
contracting parties via the Central Statistical Office. Such search takes
place by entering Taxpayer Identification Number of a given company
and subsequently filling all fields marked with the password generated by
the system, which is searching for a given company. A mistake is out of
the question because two identical Taxpayer Identification Numbers do
not exist. What is more, the system itself does accounting in every
possible record. The accounting staff is only responsible for verifying the
information read by the application and possibly making corrections
concerning e.g. dates of document issue, or amount of the invoice. The
Internet accounting is becoming more and more popular also due to
mobility. It can be used whenever it is convenient for the user. If the
accounting office owner is obliged to contact the Inland Revenue, the
accounting job may be done later. Unfortunately, reversing the order of
the tasks executed is not possible because they depend on the time of
serving petitioners e.g. by the Inland Revenue mentioned above.
The remaining functions of electronic accounting systems are as follows:
• recording income and expenses,
• issuing invoices,

10
M. Andrzejewski, K. Jonas, P. Młodkowski, Zastosowanie technik komputerowych
w rachunkowo ci, Oficyna ekonomiczna, Oddział Polskich Wydawnictw
Profesjonalnych Sp. z o.o., 2004, pp. 21-23.

69
Wioletta wieboda

• calculating insurance contributions, insurance declaration and

transferring them by relevant tools to the relevant social insurance
institution,
• generating documents which are ready to be printed out instantly,
• keeping database of contracting parties, services provided and goods
that can be extended and changed,
• providing on-line assistance11.
Apart from the benefits resulting from using financial accounting
programs, the following disadvantages should also be mentioned:
• costs of purchasing and maintaining computer software and hardware,
• necessity of systematic records and tax regulation orientation –
concerning e.g. revenue and expense lodger,
• unreliability of the system, breakdowns, lack of constant access to the
Internet or cuts in electricity may disturb the work,
• trainings in computer programs, tracking novelties,
• not very clear entries may cause suspicion of the tax inspection
authorities,
• some programs cannot make accounting patterns on the basis of
descriptions, they cannot exchange information between spreadsheet
programs e.g. Excel,
• accounting may sometimes be time consuming,
• in Human Resources and payroll systems there are some patterns
which have to be done individually for particular employees.

Conclusion

The need of collecting information about business units grows together

with economic progress. Accounting is the source of this data without
which no company would be able to conduct business activity. The data
is considered to be the business language home and abroad, because it
represents all the financial results by means of figures. The financial and
accounting systems were progressively introduced together with
regulations aimed at making an accountant’s job easier. Nowadays, it is
the computers which are used for keeping, registering and evidencing
11
https://www.mala-firma.pl/oferty-dla-firm/ksiegowosc-internetowa/148-korzysci-i-
wady-ksiegowosci-internetowej, date: 20 November 2015.

70
 Advantages and disadvantages of functions of financial…

financial records. Tax declarations may be transferred directly to

appropriate tax offices without the need to leave the work place. Users
can monitor importing and exporting documents. There is no doubt that
those systems make the accounting work easier. Thanks to them there is
an easy and fast access to archival information, easy correction of
implemented data and there is also a big amount of various reminders or
tips on how to deal with mistakes in accounting documents.

Legal acts
[1]. The Decree of the Minister of Finance of 5 July 2010 on specific
accounting rules and accounts plan for the state budget, the budgets
of local government units, budgetary institutions, state special
funds and state budgetary units having their seat or head office
outside the territory of the Republic of Poland (Journal of Laws of
2010, No. 128, item 861).
[2]. Act of 29 September 1994 on accounting (Journal of Laws 1994,
No. 121, item 591).
[3]. Act of 18 September 2001 on electronic signature (Journal of Laws
of 2001, No. 130, item 1450).
[4]. Act of 27 August 2009 on public finances (Journal of Laws of
2009, No. 157, item 1240, art. 45).

Literature
[1]. Andrzejewski M., Jonas K., Młodkowski P., Komputerowe systemy
finansowo-ksi gowe, Wydawnictwo PSB, Kraków 2000.
[2]. Andrzejewski M., Jonas K., Młodkowski P., Zastosowanie technik
komputerowych w rachunkowo ci, Oficyna ekonomiczna. Oddział
Polskich Wydawnictw Profesjonalnych, Kraków 2004.
[3]. Buk H., Pfaff J., Transformacja polskiej rachunkowo ci na tle
rozwoju rachunkowo ci mi dzynarodowej, „Studia Ekonomiczne.
Zeszyt Naukowy Wydziałowy” 164, Uniwersytet Ekonomiczny
w Katowicach, Katowice 2014.
[4]. Chomuszko M., Ksi gowo komputerowa praca z programem
Symfonia FK, Wyd. Naukowe PWN, Warszawa 2008.
[5]. Czubakowska K., Rachunkowo w małych i rednich
przedsi biorstwach, Wydawnictwo Naukowe Uniwersytetu
Szczeci skiego, Szczecin 2008.

71
Wioletta wieboda

[6]. Problemy współczesnej rachunkowo ci Tom 1, „Zeszyty Naukowe

Finanse, Rynki Finansowe” nr 61, Wydawnictwo Naukowe
Uniwersytetu Szczeci skiego, Szczecin 2013.
[7]. A list of consultations for 2009-2011 – special edition, Wyd.
Rachunkowo , Warszawa 2012.
[8]. Zeszyty Metodyczne Rachunkowo ci No. 3 (291) of 01.02.2011,
http://www.sgk.gofin.pl/12,232,130305,245,ujecie-w-ksiegach-
rachunkowych-zdarzen-po-dniu-bilansowym.html

Internet websites
[1]. http://rabbit.unisoft.com.pl/page.php?id=118&PHPSESSID=b7a05
4889695176741de6d4dc764ccce
[2]. https://www.mala-firma.pl/oferty-dla-firm/ksiegowosc-
internetowa/148-korzysci-i-wady-ksiegowosci-internetowej

72