Manual vs. Computerized Accounting Systems
The following conversation took place between Dussbls Construction Co.! Bookkeeper Kyle Byess, and the accounting supervisor, Sarah Nelson,
Sarah: Kyle, I’m thinking about bringing in 3 new computerized accounting systems to replace our manual system. Guess this means that you will need to learn how to do computerized accounting.
Kyle: What does computerized accounting mean?
Sarah: I’m not sure, but you’ll need to prepare for this new way of doing business.
Kyle: Tim not so sure we need a computerized system. I’ve been looking at some of the sample reports from the software vendor. It looks to me as if the computer will not add much to what we are already doing,
Sarah: What do you mean?”
Kyle: Well look at these reports. This Sales by Customer Report looks like our revenue journal, and the Deposit Decal Report looks like our cash receipts journal, Granted, the computer types them, 50 they look much neater than my special journals, but don’t see that we’re gaining much from this chasse.
Sarah: Well surely there’s more to it than mice-looking reports. I’ve got to believe that a computerized system will save us time and effort someplace.
Kyle: 1 don’t see how: We still need to key transactions into the computer: If anything, there may ‘be more work when it is all said and done.
Do you agree with Kyle? Why might a computerized environment be preferred over a manual?
Manual vs. Computerized Accounting Systems
I disagree with Kyle. A computerized system might be better than a manual one because it assures accuracy with the right inputs. Additionally, it saves time as employees get used to the new system. Manual accounting is convenient and cost-effective. The accuracy of electronic record-keeping is higher, and it can save time. Most accounting programs include automatic backups, invoice templates, reporting options, and other helpful features. They can also manage a lot of data, minimize human error, or completely eliminate it.
A computerized system has benefits like real-time access to financial data, quicker and more accurate record keeping, automated invoicing, and cost savings (Kumar, 2019, p.13). For example, the majority of accounting software can produce invoices, receipts, and credit notes automatically. Moreover, depending on the program used, your data might be stored in the cloud. This allows you to check your accounts whenever you want and gives your employees access to the data they need no matter where they are. You’ll have more time for client prospecting and marketing strategy improvement because a computer handles all the calculations. Among the advantages of computerized accounting are:
Automation:
Many of the tedious and time-consuming tasks involved in manual accounting are eliminated by computerized accounting because the software performs all calculations. For instance, invoices are processed automatically once issued, making accounting simpler (DeFrancesco et al. 2018, p.646).
Efficiency:
A computerized system performs repetitive tasks more quickly and efficiently than a manual system, such as entering transactions into journals, posting them to the general ledger, creating trial balances, and eventually automatically generating financial statements.
Accuracy:
Financial reports will be less prone to human error and more accurate than those produced by the general ledger posting or the journal entry of transactions.
Timeliness:
The ability of computerized systems to process large volumes of information quickly allows reports to be produced more quickly. Because information reaches decision-makers more quickly, decisions are made better.
References:
DeFrancesco, C. J., Pasha, S., Miller, D. J., Betz, R. R., Clements, D. H., Fletcher, N. D., … & Harms Study Group. (2018). Agreement between manual and computerized designation of neutral vertebra in idiopathic scoliosis. Spine deformity, 6(6), 644-650.
Kumar, K. S. (2019). Factors affecting the adoption of computerized accounting system (CAS) among smes in Jaffna District. SAARJ Journal on Banking & Insurance Research, 8(6), 11-15.
