Quick questions on Technology in finance - SQA Higher Business Management

Spreadsheets are widely used to prepare cash budgets and financial statements. They calculate automatically and accurately, update instantly when one figure changes, allow "what if" analysis (modelling different scenarios, such as a sales fall), and present data in graphs and charts, saving time and reducing errors compared with doing it by hand.

Accounting software records every transaction, produces invoices, tracks debtors and creditors (who owes the firm and whom it owes), and generates financial statements, ratios and reports automatically. This speeds up bookkeeping, reduces errors, and gives managers up-to-date financial information for decisions.

speed (instant calculation, payments and reports); accuracy (fewer human errors); automatic calculation, reporting and "what if" analysis; convenience (banking and payments any time); and better, up-to-date financial information for decisions.

the cost of software and the need for training; the risk that a single formula or input error is repeated and goes unnoticed; the need to keep financial data secure (against fraud and hacking) and backed up; and dependence on the technology, so a system failure disrupts financial work.

Describe two ways technology could be used to manage a business's finances. [2 marks]

Explain one advantage and one disadvantage of using accounting software. [4 marks]