In accounting, transactions are processed, recorded, and presented either manually or in a computerized manner. Traditionally, bookkeeping was done by hands that involved the use of registers, vouchers, and accounts books, etc. Trends have now changed.
The premises of both systems are the same. However, their mechanisms, quality of results, etc. are drastically different.
In this article, we tell you about the six main differences between manual and computerized accounting systems
1. Mechanism
Manual accounting systems use pen and paper and require a lot of human effort to record transactions. On the contrary, computerized accounting uses accounting software to record transactions electronically.
2. Errors
Since manual accounting systems only involve human effort, there are more chances of errors. Besides this, identifying where the error lies is more difficult than fixing it.
3. Security
Your data needs to be secured and this is a huge priority for all businesses. Computerized accounting system offers you to keep your data on the cloud. Unlike manual accounting system, your data is recorded remotely and securely in a computerized system.
4. Speed
This is perhaps the most crucial difference between the two systems. In a day and age where people prefer speed and convenience, computerized accounting system offers that. It is much faster than a manual accounting system.
5. Back-Up
In a manual system, you cannot make a back up of all the transactions recorded. Computerized accounting system, on the other hand, automatically saves and backs up your entire data.
6. Financial statements
In a manual accounting system, financial systems are prepared at the end of the period. While in a computerized accounting system, your financial statements and trial balance are just a click away.
