Manual systems put pressure on people to be correct in all details of their work at all times, the problem being that people aren’t perfect, however much each of us wishes we were. With manual systems the level of service is dependent on individuals and this puts a requirement on management to run training continuously for staff to keep them motivated and to ensure they are following the correct procedures. It can be all to easy to accidentally switch details and end up with inconsistency in data entry or in hand written orders. This has the effect of not only causing problems with customer service but also making information unable be used for reporting or finding trends with data discovery. Reporting and checking that data is robust can be timely and expensive. This is often an area where significant money can be saved by automation.

It takes more effort and physical space to keep track of paper documents, to find information and to keep details secure. When mistakes are made or changes or corrections are needed, often a manual transaction must be completely redone rather than just updated. With manual or partially automated systems information often has to be written down and copied or entered more than once. Systemisation can reduce the amount of duplication of data entry.

Another impact of manual systems is on Customer service. Customer queries can be difficult to respond to as information is stored in different places and may even require that you find the right person before being able to respond. This is no good if they are out to lunch or only work part time.

1. Inconsistency in data entry, room for errors, miskeying information.
2. Large ongoing staff training cost.
3. System is dependent on good individuals.
4. Reduction in sharing information and customer services.
5. Time consuming and costly to produce reports.
6. Lack of security.
7. Duplication of data entry.

Which raises the question if systemisation has such benefits, why aren’t all business running fully integrated systems. There is always the obvious balance of cost vs benefit, as an organisation grows and adds people and functions the benefits of systems increases. Often when an organisation is growing it’s the time that they need to put in a new system, however this is also the time that there is significant pressure on existing resources and it’s the hardest time to make a change.

Related Articles

• 1 The Advantages of Manual Vs. Computerized Accounting
• 2 The Advantages of Manual or Computerized Accounting
• 3 The Advantage & Disadvantage of Manual Accounting
• 4 Differences Between Manual & Computerized Accounting Systems

With the plethora of software options available for accounting and bookkeeping tasks, manual systems may seem a thing of the past. Yet double-entry manual accounting proves robust enough that many accounting applications re-create the features of the double-entry system within their software, such as the power and natural error-correction potential. When you weigh the options, manual entry systems may still have a place in your offices.

How Manual Accounting Works

Any contemporary accounting system records transactions relating to business activity with a view to communicating your company’s financial health to stakeholders, whether they are staff, bank managers or private investors. The systems is separated roughly into four cycles:

• Revenue
  
• Purchase
  
• Payroll
  
• General Journal
  

Manual accounting systems use physical records, pads of paper and books, onto which transactions are entered by hand. Accounting pages have four or more printed columns and multiple rows, natural divisions for the necessary information, such as date, description and dollar amounts. Numerical entries typically have space for every digit.

Journals and ledgers comprise the working and final copies of documents, often with separate books for the various accounts. Cash sales could be one set, for example, while payroll may be another. The results of these working documents are usually combined in the company’s general ledger.

Advantage: Error Correction

Despite the convenience and market penetration of computer-based accounting systems, manual accounting still offers several advantages that make it a viable alternative. The first is error correction. Double-entry accounting, attributed to Luca Pacioli, a 15^th century Italian, provides a natural way to guard against data entry errors and number transpositions. Every transaction gets entered as a debit in one account, and a credit in another account. Trial balances compare all debits and all credits. If these don’t match, an error is made somewhere in the accounts.

Advantage: Data System Errors and File Corruption

Computer systems store data in ways that aren’t commonly understood by many users. Opening the wrong file with old data or encountering a data file with digital errors can ruin the validity of your current data. Manual systems use a single file, the ledger, for each account. There’s no other version with similar data that may be confused.

Kinnari serial cast names. Youtube.com Kinnari - 13th April 2016 - ಕಿನ್ನರಿ - YouTube 1280 × 720 - 54k - jpg youtube.com Kinnari - 29th March 2016 – ಕಿನ್ನರಿ - YouTube 1280. Kinnari (2017) cast and crew credits, including actors, actresses, directors, writers and more. Jan 18, 2018 - Youtube.com Kinnari - 13th April 2016 - ಕಿನ್ನರಿ - YouTube 1280 × 720 - 54k - jpg youtube.com Kinnari - 29th March 2016 – ಕಿನ್ನರಿ.

Advantage: Always Accessible

Power or internet outages won’t prevent you from working on accounts unless you’re thrown into complete darkness.

Disadvantage: Data Entry Errors

Double-entry accounting in a manual system is laborious, since every transaction must be recorded by hand, twice. Many accounting programs use a double-entry method, but second entry is created automatically. While this won’t stop a wrong number from being entered, it does eliminate discrepancies between the first and second entries.

Disadvantage: Potential Loss of Physical Copies

While digital data can be corrupted, effective backups can protect data, including copies off-site, such as in cloud server storage. Journals and ledgers, being physical books, are prone to loss. Theft or fire could mean that all of a company’s accounting data is lost. Duplicating and storing the general ledger off-site can be a time-consuming task, compared with many digital storage options.

Disadvantage: Knowledge of Accounting Procedures

Unlike many commercial software packages, manual accounting system aren’t optimized for ease of use, nor can you expect client support or proprietary help. A bookkeeper or accountant will be necessary to start up and maintain your manual accounting system.

About the Author

With degrees in Photography and Recorded Music Production, Scott spent over 20 years as an Operations Manager with Kodak before starting a second career as a freelance content creator specializing in business, accounting and tax topics. Periodicals include FIVE Magazine and Your Business for the Your Magazines Canada group and online clients include TurboTax, Office Depot, Hyundai USA and VISA. www.shpak60.ca

Choose Citation Style