What Is a Computerized Accounting System (CAS)?



Janine Motos
Editor
August 17, 2023

A Computerized Accounting System (CAS) is a technological advancement that automates complex accounting processes, replacing manual data entry with computer-based execution. CAS has revolutionized accounting by simplifying tasks and streamlining operations.

Instead of using conventional accounting journals, books, and Excel spreadsheets, CAS creates and maintains reliable, standardized records while offering mobile and fast reporting capabilities.

Its features include enhanced accuracy, increased productivity, tighter internal control systems, and accessible data backup and restoration. Many companies now offer CAS and related services, embracing the benefits of modern accounting technology.

Why is a Computerized Accounting System Important?

CAS is crucial for individuals, firms, and businesses as it automates accounting practices. The system's speed and accuracy are its standout features, making it essential, especially for larger enterprises handling numerous transactions across various verticals at different times.

The need for a computerized accounting system arises from its remarkable advantages, agility, and reliability. It offers cost-effective management of banking activities and business transactions. Moreover, it efficiently handles a significant volume of businesses precisely, enabling swift and accurate financial reporting.

Embrace CAS: Advantages for Your Organization

Enhanced Accuracy and Efficiency

Computerized accounting eliminates human errors in calculations and improves accuracy. It streamlines processes, enabling accountants to handle more information efficiently. The system also enhances inventory control, payment collection, and cash flow management.

Time and Cost Savings

Automation in computerized accounting reduces the effort to complete accounting tasks. Moreover, it saves time. Configured software automates data entries, minimizing the need for extensive staff involvement.

Organizational Efficiency

Computerized accounting ensures seamless integration with other business processes like taxation, banking, purchases, and sales. Data entered once, affects all relevant ledgers, promoting the organization and streamlining operations.

Efficient Data Storage and Security

Data is quickly stored and securely backed up in computerized accounting systems. CAS reduces the risk of data loss due to mishaps and enables rapid data recovery.

Robust Security and Management

Computerized accounting systems offer automated security settings, protecting business data and providing peace of mind for business owners.

Seamless Reporting and Analysis

Generating reports is swift and hassle-free with computerized accounting. Quick data retrieval allows for faster adjustments in business strategies. Reports for various government agencies can be quickly complied with, saving valuable time.

Regulatory Compliance Simplified

Computerized accounting facilitates quick compliance with statutory requirements, including VAT. It ensures accurate data for filing returns, avoiding manual errors and time-consuming procedures.

 

Components of a Computerized Accounting System

Business owners must know it’s not a one-time task when transitioning to a computerized accounting system (CAS). Various components within the existing platforms require synchronization to ensure CAS compliance and generate accurate accounting records.

According to CAS rules, four key components require synchronization:

  • Accountants must manage your general journal and subsidiary records.
  • Accounting records encompassing sales, inventory, purchases, accounts receivable, accounts payable, payroll ledger, subsidiary ledger, and similar items should be prepared.
  • Application systems responsible for generating billing statements, cash vouchers, invoices, official receipts, and other entries for the subsidiary ledger must be identified.
  • The cash register machines (CRM) and point of sale (POS) must connect to the computerized accounting system.

Identifying and understanding these components is the initial step toward CAS compliance. Once you grasp the CAS ecosystem components, your company’s registration process and implementation will be more manageable.

Requirements of BIR CAS in the Philippines

Complying with the CAS BIR requirements is crucial for legal adherence, avoiding penalties, and maintaining transparency in your business. CAS registration facilitates efficient tax audits and enhances business credibility by ensuring accurate records and fair tax reporting.

We understand that government-compliance tasks can be overwhelming. Let’s simplify the Computerized Accounting System BIR Requirements for you.

Documentary Requirements for CAS Registration

To complete your BIR CAS registration, prepare the following documents:

1. An accomplished BIR Form 1900

2. Documents to validate your company’s profile, including BIR Certificate of Registration, a list of branches that will use the computerized accounting, a map of the headquarters location, and past-issued BIR permits.

3. Technical CAS requirements, such as the following:

  • application name
  • samples of reports and correspondences generated by the CAS system
  • disaster and recovery plan
  • proof of system ownership
  • process and system flow
  • a summary of features and functions.

4. For system enhancements or modification applications, include the following:

  • previous BIR Permit to Adopt CAS
  • a letter detailing the changes or improvements to your CAS.

Remember that BIR may change these requirements in the future. Verifying with an authorized representative from the BIR before finalizing your registration is advisable.

FAQs

Get answers to some of the most commonly asked questions about BIR CAS

CAS Registration is mandatory for all Large Taxpayers as per the BIR mandate. If your business is scaling towards the large taxpayer category, you'll discover that using Computerized Accounting Software is beneficial. Thus, it's essential to proceed with CAS Registration with the BIR.

No, you don't need it. New applicants can opt for CAS Registration using a Permit to Adopt CAS, per RMC No.5-2021. It means you can choose an accounting system without the previous permit requirement, making it easier to research and select the right CAS.

If your chosen accounting software is not BIR-compliant, it can create operational issues during CAS registration with the BIR. RMO No.7-2015 states that non-compliant systems may lead to penalties. To avoid this, consult trusted Certified Public Accountants to know your CAS-compliant accounting software options.

CAS Registration is not a one-time process; it depends on your business's growth and changes. If significant financial effects are evident in the system compared to the previous one, you may need to re-apply for CAS Registration. However, minor system changes only require written notice to the BIR RDO Office, as mentioned in RMC No.5-2021.

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About the Author


Janine Motos
Janine Motos

Editor

Janine has worked and written several blogs for Mustard Seed Systems Corporation as a Marketing Manager. This tech-savvy Website Admin now works as a Digital Innovations Lead, helping customers innovate and improve internal processes. She harnesses her IT expertise and power of words to drive transformative change for businesses of all sizes.

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