comparison & contrast revision (1)

8/12/2019 Comparison & Contrast Revision (1)

1/5

THE DIFFERENCE BETWEEN MANUAL ACCOUNTING AND ELECTRONIC ACCOUNTING

A Comparison & Contrast Essay

However, are manual and computerized accounting systems so totally

different, or are any of the systems in an absolutely advantages position, or will a

manual accounting system eventually totally disappear? In actuality, it is hardly

possible to give a positive answer on any of these questions. In fact, it should be said

that both accounting systems have its advantages and disadvantages which become

obvious on closer analysis.

First of all, it should be said that, at first glance, a manual accounting system

creates a number of inconveniences. For instance, in manual accounting system, each

of the steps in the accounting cycle is performed by hand. Practically, this means that

transactions are entered into a journal and then posted to the ledger. In such a way,

financial statements are derived from many manual computations from ledger

balances.


2/5

According to Weber, such a complexity of the process and computations may

sound quite shocking for the supporters of the mass implementation of computerized

accounting systems since they simplify substantially the accounting cycle and the

process of computation because, firstly, each of the steps in the accounting cycle is

made automatically by the computer that naturally decreases the time spent on this

process. Than all information may be collected and centralized without spending time

on entering of transactions into a journal and then posting them to a ledger. In fact,

all these operations are automotive and centralized due to efficient work of

computers and software. Finally, a computerized accounting system does not need

time on many long lasting and, consequently, time wasting, manual computations

from ledger balances. (2013)

According to Vitez, from such a point of view, a computerized accounting

system seems to be absolutely better, more efficient and more reliable than a manual

accounting systems since there is little room for errors because of low influence of

human factor in the accounting processes. Consequently, one may wonder how and

what is more important why then a manual accounting system still persists and is still

applied. (2011)

However, the answer on this question is also quite simple. First of all, it should

be said that small businesses still use a manual accounting system and the main

reason is the basic principle of the efficiency of an accounting system, i.e. high

benefits and low costs of information. In this respect, it should be said that, even

though a manual accounting system is much more complicated and time wasting, this

system is substantially cheaper and does not need additional training of a personnel


3/5

to be applied efficiently. This is why small businesses which, as a rule, does not have

exorbitant benefits, attempt to minimize costs on accounting system in such a way.

Instead, larger corporations, for which time is crucial and accounting is too difficult

to be done manually with sufficient reliability and correctness, prefer to use a

computerized accounting system which costs are substantially overweighed by

benefits from its use because of short time spent on accounting processes, reliability

and accurateness of information received.

Finally, a manual accounting system is still important and essential because, in

order to understand what a computerized accounting system does, one must

understand how a manual accounting system works. Not surprisingly that many small

businesses, which begin from a manual accounting system, gradually convert to a

computerized accounting system as business grows. In fact, it is a natural and

inevitable process since the larger business means more information to be analyzed in

shorter terms. As a result, the only logical choice for a growing business is to convert

from a manual accounting system, when all its functioning is understandable, to a

computerized accounting system, which efficiency is obviously higher in larger

companies.

Thus, taking into account all above mentioned, it is possible to conclude that

nowadays both manual and computerized systems co-exist. However, it is hardly

possible to say that they compete with each other because they are basically applied

in different companies. To put it more precisely, a manual accounting system is

basically used in small businesses, while a computerized accounting system is use in

larger companies. At first glance the use of a manual accounting system seems to be a


4/5

bit paradoxical since it is less efficient, slower and more complicated than a

computerized one. However, the explanation of such a paradox will simple: higher

costs of a computerized accounting system and necessity to learn the principles of

work of an accounting system that is easy to do with a manual accounting system.

Consequently, a manual accounting system will hardly disappear in the nearest future

though the role and spread of a computerized accounting system will keep growing.

Revised by:

Lagman, Alyssa Noreen R.

AT102


5/5

Bibliography

Copyright 2013 Hearst Communications, Inc. Manual Accounting Vs. ComputerizedAccounting.http://smallbusiness.chron.com/manual-accounting-vs-computerized-accounting-4019.html,2013.

Copyright 2013 Experience, Inc. Manual Accounting Versus Computerized Accounting.http://www.experience.com/alumnus/article?channel_id=accounting&source_page=breaking_in&article_id=article_1173385201144,2013.

Gelinas, Ulric.Accounting Information Systems. New York: Cengage Learning, 2011.

Amidu, Mohammed. E-Accounting Practices among Small and Medium Enterprises.

Journal of Management Policy and Practice, February 2011.
http://smallbusiness.chron.com/manual-accounting-vs-computerized-accounting-4019.htmlhttp://smallbusiness.chron.com/manual-accounting-vs-computerized-accounting-4019.htmlhttp://smallbusiness.chron.com/manual-accounting-vs-computerized-accounting-4019.htmlhttp://www.experience.com/alumnus/article?channel_id=accounting&source_page=breaking_in&article_id=article_1173385201144http://www.experience.com/alumnus/article?channel_id=accounting&source_page=breaking_in&article_id=article_1173385201144http://www.experience.com/alumnus/article?channel_id=accounting&source_page=breaking_in&article_id=article_1173385201144http://www.experience.com/alumnus/article?channel_id=accounting&source_page=breaking_in&article_id=article_1173385201144http://www.experience.com/alumnus/article?channel_id=accounting&source_page=breaking_in&article_id=article_1173385201144http://smallbusiness.chron.com/manual-accounting-vs-computerized-accounting-4019.htmlhttp://smallbusiness.chron.com/manual-accounting-vs-computerized-accounting-4019.html

comparison & contrast revision (1)

Documents