Accountancy · Ch 14 — Computerised Accounting
Manual Accounting vs Computerised Accounting
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Manual Accounting vs Computerised Accounting
2. Manual Accounting vs Computerised Accounting
| Basis | Manual Accounting | Computerised Accounting |
|---|---|---|
| Recording | Every transaction is written by hand into the Journal/subsidiary books, then separately posted to each ledger account | A transaction is entered once (as a voucher); posting to every affected ledger happens automatically |
| Speed | Slow — each step (Journal, Ledger, Trial Balance, Final Accounts) is done separately and sequentially | Fast — reports are generated instantly from data already entered |
| Accuracy | Prone to human errors in totalling, carrying forward balances, and copying figures between books | Free of arithmetical/copying errors, since the software calculates and carries forward automatically |
| Storage and retrieval | Physical registers/ledgers, bulky to store and slow to search through | Digital storage, searchable and retrievable almost instantly |
| Cost of errors | An error can go undiscovered for a long time and needs manual tracing through several books | Many errors are structurally prevented (e.g. software will not let a Journal entry go unbalanced) |
| Cost of setup | Low — pen, paper, and registers | Requires investment in computer hardware, software, and staff training |