comparison & contrast (revision)

8/12/2019 Comparison & Contrast (Revision)

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3/5/2013Essay 4: Comparison & ContrastRevision

#20 Lagman, Alyssa Noreen R.AT102


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The Difference between Manual Accounting and Electronic Accounting

However, are manual and computerized accounting systems so totally different,

or is 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 bothaccounting 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.

Obviously, such a complexity of the process and computations may sound quite

shocking for the supporters of the mass implementation of computerized accountingsystems 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.

Naturally, from such a point of view, a computerized accounting system seems tobe 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.

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 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


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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 smallbusinesses, 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 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.

comparison & contrast (revision)

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