Comparing Manual and Computerized Accounting Systems


Every business essentially needs to keep an account of its daily financial transactions. This is achieved using a suitable system of accounting to ensure that all transactions are accurately and correctly recorded in its general ledger. Thankfully, technological developments have facilitated accounting procedures for most businesses. Here is a comparative study of the two kinds of most frequently used accounting systems, manual and computerized accounting system.

Manual Accounting

This style of accounting necessarily requires a number of paper ledgers for recording financial dealings. It is a normal practice for businesses to keep different ledgers for accounting various parts of accounting system, the most common ones being payable account, receivable accounts and sales. These ledgers are then consolidated into one general ledger, giving the balance of each of the ledgers.

Benefits Manual Accounting

Though manual maintenance of accounts is quite tedious and consumes a lot of time, it has certain benefits too. Ledgers can be reviewed easily and the accountant can incorporate simple changes if needed. It is convenient to reconcile individual accounts as each ledger contains information in an organized manner. The other benefit is that the accountant can physically handle any ledger and make notes against customers’ account if there are any issues needing correction or clarification.

Computerized Accounting System

In such systems, accountants enter data in spreadsheets, which is subsequently processed by the computer and posted in the required ledger or can be used for preparing financial statements. Use of computerized accounting system enables accountants to analyze data and point out variations promptly and accurately. Moreover, since the system provides dealings of all the departments of the company, the accountant can get improved overall financial information.

Compared to manual accounting, computerized accounting system offers more benefits. This style of accounting delivers more information in shorter spans of time, the built in formulas check and confirm totals made and the chances of errors are substantially reduced. Accounting systems can also be tailored as per industries’ requirements, meaning that accountants have the option of using predefined templates for maintaining their general ledger. It becomes very easy for them to store financial data for a number of years, thus empowering them to review and compare data of previous years without going through heaps of ledgers of previous years.

Best Method

A majority of companies these days prefer using computerized accounting system for keeping records of their financial dealings. This superior system enables them accurate recordings of business dealings and swiftly creates financial statements for review of management.

Though the purpose of manual accounting has undergone changes, it wouldn’t ever be lost for ever. Accountants need to review all the financial information provided by accounting system to ensure its accuracy and validity. Moreover, accountants have to ensure that the financial information conforms to the Generally Accepted Accounting Principles or other guidelines stipulated by regulatory agencies.


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