Elements of Accountancy · Ch 15 — Computers and Accounting
Manual Accounting vs Computerised Accounting
Manual Accounting vs Computerised Accounting
Comparing the manual method (the one used to teach every earlier chapter of this book) against a computerised system side by side makes clear exactly what a computer adds — and what it does not change.
| Basis | Manual Accounting | Computerised Accounting |
|---|---|---|
| Recording of a transaction | Written by hand into a journal/subsidiary book | Keyed once into a voucher/entry screen |
| Posting to ledger | Done separately, by hand, for every account affected | Done automatically by the software the instant the voucher is saved |
| Balancing and trial balance | Prepared manually, account by account | Generated instantly, correct by construction (a computer cannot make an arithmetic slip while adding) |
| Speed | Slow for a large number of transactions | Very fast even for a very large number of transactions |
| Risk of clerical error (wrong casting, wrong carry-forward) | Present, and grows with volume | Sharply reduced, since the machine performs the arithmetic |
| Cost | Low starting cost (paper, registers, staff time) | Requires investment in hardware, software and staff training |
| Storage and retrieval of old records | Bulky paper registers; searching an old entry can be slow | Compact electronic storage; a past entry can usually be searched and found in seconds |
| Dependence | Depends on a trained bookkeeper's care and consistency | Depends on correct data entry and on the computer system's own working order (power supply, backups) |
Advantages of computerised accounting. Beyond speed, a computerised system offers: accuracy in every calculation once the correct data is entered; ready availability of information — a manager can call up an up-to-date trial balance or a customer's outstanding balance at any moment rather than waiting for a periodic manual statement; easier storage and retrieval, since years of records fit into a small amount of storage space and can be searched instantly; and scalability, since the same software can usually handle a growing number of transactions without a proportionate rise in staff. …
A mistake made in the ordinary course of manually recording, casting (adding) or carrying forward figures — such as writing a wrong amount, posting to the wrong account, or a wrong total — that a computerised system greatly reduces because the ar …
The ability of a system to handle a growing volume of transactions or users without a proportionate increase in cost, time or staff effort — a strength of computerised accounting compar …