Limitations of a Computerised Accounting System

Computerisation is not without its drawbacks, and a balanced answer on this chapter needs to set these out honestly alongside the advantages:

• High initial cost. Purchasing hardware and software, and training staff to use them, requires a significant upfront investment that a very small business may find hard to justify.
• Dependence on power supply and technical support. The system cannot function during a power cut unless backed by an uninterrupted power supply, and a technical fault may need a specialist to resolve, unlike a manual system which needs only pen and paper.
• Risk of data loss or corruption. A hard-disk failure, virus, or accidental deletion can wipe out records if they have not been backed up regularly — a risk a paper register, though bulkier, does not share in the same way.
• Risk of fraud, hacking or unauthorised access. Poorly protected systems can be accessed or manipulated by unauthorised persons, and a skilled wrongdoer can sometimes alter digital records more invisibly than a paper entry, which leaves a physical trace.
• System failure disrupts the entire process. If the software or hardware fails, accounting work can come to a complete halt until it is restored, whereas a manual system, though slower, keeps working.
• Resistance to change. Staff used to manual bookkeeping may resist learning a new system, and errors made while a business is still adapting to a new package can be significant.
• Health concerns. Prolonged use of computers can cause eye strain and related problems for data-entry staff, an issue manual bookkeeping does not raise in the same way. …