Customized software is software that has standardized features to meet the special requirements of the users. It provides the scope of changing the features of accounting software. The functions of this software can be programmed as per the needs and requirements of the users. This type of software best suits the needs of medium and large businesses. Its cost of installation and maintenance is comparatively higher. It can be easily linked to other information systems.
Advantages of Customized and Tailored Accounting Software
The following are the advantages of Customized and Tailor-made Accounting Software.
- This software is suitable for medium and large business organizations.
- It caters to the specific requirements and needs of the users.
- It can be modified as per the needs of the organization.
- It has a high level of security and minimizes the risk of loss of data and unauthorized access to data.
- It cannot be easily imitated or duplicated in the market due to differences in the needs and requirements of different users.
- It does not involve a high cost of training as the training can be imparted within the organization by experienced personnel.
- It can be easily linked to other information systems.
- It forms an integral part of the organizational MIS.
Disadvantages of Customized and Tailored Accounting Software
The following are the disadvantages of Customized and Tailor-made Accounting Software.
- It involves the high cost of installation and maintenance.
- Developing customized software is a time-consuming process and involves a high cost of development.
- Maintenance of this software is difficult as there exists limited availability of knowledge with the developers.
- It lacks a standard training module.
Any interest paid on capital is considered as an expense and is shown in the Profit and Loss Account. Treatment of interest on capital in the final accounts is as follows.
Treatment of interest on drawings in the final accounts is as follows. Firstly, interest in drawings is shown on the credit side of the Profit and Loss Account.
Operating Profit can be defined as the profit earned by carrying the normal business activities. It is computed by subtracting the operating expenses from the gross profit.
The balance sheet is the last financial statement that is prepared by any organization. This statement helps to ascertain the true financial position of an enterprise at the end of an accounting period
A profit and Loss Account is the second financial statement prepared by an organization. This account is prepared to ascertain the net results of a firm in form of net profit earned or net loss incurred during an accounting period.