The discovery of computers has transformed the financial industry and how business deals are transacted. It is possible for accountants to keep large amounts of data, conduct intricate calculations and manage financial transactions all from a computer. Computer technology today enables global economic capabilities that were impossible only a few decades ago, and computers now influence both business as well as personal financial management.
Ease of Communication
Computers enhance financial communication within members of an organization through a network system connecting various departments. With the use of computers, key financial decision makers are able to send financial reports and strategies instead of holding meetings. This system allows people in the finance sector to get updates on world stock exchange, and price changes affecting their business. The use of email also enables financial professionals to inform other departments and consumers of key policy changes, such as price modifications on products and goods.
Spreadsheet Software
Spreadsheet software influences the way both large and medium-sized firms, as well as individuals, key in and organize financial data. Spreadsheet applications are used to run day-to-day financial tasks, such as compiling financial data, presenting the data in an organized manner through the use of charts and graphs, drawing budgets and calculations of complex transactions. This application comes with computer programs, such as Microsoft excel, that enables organizations and individuals to plan finances without wasting too much time.
Data Storage
Computerization makes data storage manageable and less bulky. Computers enable organizations to store large amounts of files in a small space, allowing us to have a large track of historical transactions, while avoiding consumption of space that would otherwise be consumed by piles of files in cabinets. Keeping financial records is critical for organizations, as well as individuals, as it allows tracking of payment records, debts owed, purchases done and bank transactions made. Having detailed financial records helps an organization to continually audit and analyze business performance.
Programmed Transactions
Computerized financial software conducts programmed business and accounting transactions. Most finance departments utilize accounting applications, such as QuickBooks, to perform financial transactions and to manage a company’s income and expenditure. These programmed applications enable an organization or individuals to keep track of financial operations and also conduct complex transactions effortlessly without consuming a lot of time and labor that would otherwise be used in case of manual transactions. Organizations can purchase software depending on nature of work; other applications include Grant Management application and payroll software.
Financial Information
Computers have enhanced access to wide financial information through internet access. Business operators or individuals can now access information on investment prospects, and conduct detailed research on its profitability. There is also a wealth of financial information available on the internet, such as world prices, tax changes, inflation rate and currency exchange rates that make it easier for institutions and individuals to make informed financial decisions. The internet also provides a wide source of information and access to specific financial reports of companies in .
The Meaning of Fundamental Concepts in Economics
Economics can be broadly classified into fundamental economics, macro-economics, micro-economics, international economics and personal finance economics. These are also the core ideas that explain the various fields of economics and are essential for understanding their purpose and application to real-world situations. Each one of these categories has fundamental concepts that can help understand economics in all its aspects.
What are the Fundamentals of Economics Principles?
The key concepts of fundamental economics include decision making and cost benefit analysis, division of labor and specializations, economic institutions, economic systems, incentives, money, opportunity cost, productive resources, productivity, property rights, scarcity, trade exchange and interdependence. Division of labor means dividing the workforce into various crafts and professions. Productivity is the relationship between inputs and outputs and this can be applied to individual factors of production.
What is Macro-Economics in Simple Terms?
Macro-economics deals principally with the national, regional or global economy at large and these include aggregate demand and supply, budget deficits and public debt, business cycles, economic growth, employment and unemployment, fiscal policy, inflation and GDP. Demand and supply is the twin driving forces of the market economy. Demand is not limited to measuring the wants of people but also involves the amount of goods and services that people are willing to buy. Fiscal policy comprises government spending and taxation. It also involves any government assistance to the private sector.
What is the Basic Economic Theory of Micro-Economics?
Micro-economics focuses on the decisions and economic behavior of households and businesses and how these affect the price and therefore, supply and demand of goods and services. The fundamental concepts of micro-economics include competition and market structures, consumers, demand, elasticity of demand, income distribution, market and prices, profits, price elasticity. Competition leads to efficiency among firms and enables prices to be low. Competition can be categorized into perfect and monopolistic competition. Price elasticity can be termed as a measure of the response that demand has to a change in price.
What is International Economics?
International economics looks at how the financial dealings among different countries affect consumers and governing financial institutions. Some basic concepts here include balance of trade and balance of payments, economic development, barriers to trade, exchange rates, benefits of trade and foreign currency markets and trade. The exports of a country minus its imports would be balance of trade. Balance of payments (BOP) is used by counties to monitor all international monetary transactions. BOP is divided into current account, capital account and financial account.
What are the Basics of Personal Finance Economics?
Personal finance economics focuses on individuals and families and how they handle their monetary resources. Key concepts include compound interest, interest, financial markets, human capital, insurance, money management, budgeting, risk and return, saving and investing. As per an economist the meaning of saving would be consuming less in the present and keeping your resources for future use. Investments are putting your resources to work in order to earn more from them.
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