Accountancy · Ch 10 — Computerised Accounting System – Tally
Comparison of Manual Accounting and Computerised Accounting
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Comparison of Manual Accounting and Computerised Accounting
Manual accounting and computerised accounting follow the same underlying accounting principles, but differ substantially in how the work is actually carried out.
| Basis | Manual Accounting | Computerised Accounting |
|---|---|---|
| Recording process | Every transaction is recorded by hand in a Journal, then separately posted to Ledgers, then balanced and summarised into a Trial Balance | A transaction is entered once as a Voucher; the software automatically posts it to the relevant ledgers |
| Speed | Slow — each step (journalising, posting, balancing) is done manually | Fast — processing and report generation are near-instantaneous |
| Accuracy | Prone to human errors — wrong postings, casting/totalling mistakes, transposition of figures | Free from posting/calculation errors once the initial data entry is correct |
| Report generation | Each report (Trial Balance, P&L, Balance Sheet) must be separately prepared as a distinct manual exercise | All related reports are generated automatically from the same underlying voucher data |
| Storage | Physical books/registers, requiring significant physical storage space | Digital storage, compact and easily backed up |
| Retrieval of information | Time-consuming — often requires manually searching through several books/pages | Instant — records can be searched and filtered by date, ledger, or voucher type |
| Cost | Lower initial cost, but higher ongoing labour cost for a large volume of transactions | Higher initial cost of software/hardware/training, but lower ongoing cost per transaction at scale |
Definition 1Manual Accounting
A system of maintaining books of accounts by hand — journalising, posting to ledgers, and preparing a trial balance and final accounts as separate …