A comparison between manual and computerized accounting systems

Most small to medium-sized companies use either a manual or a computerized accounting system to track income and expenses. Assets, liabilities, revenue, expenses and equity must be documented and transferred to a general ledger containing the company’s financial details. This information can then be analysed to help business owners make future financial decisions. This article compares the differences between the two. We look at it from a time and efficiency, accuracy, reliability, creativity in analysis, reporting, staffing and cost point of view.

Time and efficiency
Computerized accounting has the advantage of increased efficiency and time management when compared to manual accounting. Computers may more rapidly perform accounting functions or assessments than manual accounting systems, once data has been entered into the system.

Computerized accounting has the advantage of higher accuracy when compared to manual accounting, according to the College Accounting Coach. The potential for human error is greater when employees are manually completing accounting procedures. This may be particularly true when dealing with multiple currencies, since computerized programs can instantly convert exchange rates, according to “Guide to Computerizing Your Accounting System” from The Manager’s Electronic Resource Centre.


The advantages of manual or computerized accounting systems may be equal when it comes to reliability. Manual accounting can function independently of machines so work can continue when “the system” is off.

But with modern backup systems and increased functionality, the disadvantage of reliability in computerized accounting may be lessened.

Creativity in Analysis

Although computerized accounting systems are experts at rapidly computing complex analyses of accounting transactions and reports, the subtlety and focus of an analysis’ conjecture or hypothesis depends on the person operating the system. From this point of view, manual accounting may have an advantage over computerized accounting systems. Without the nuance and experience of an actual person, computerized accounting systems lose their potential for sophisticated analysis. Additionally, analysis may be hampered or obstructed by software design.


The advantages of computerized accounting include fast, complex reporting. Computerized systems can produce invoices, purchase orders and other documents more quickly. Many reports are automatically updated and instantly available.


Neither manual nor computerized accounting systems take the advantage when it comes to staffing. It can be costly to staff qualified accountants to complete manual accounting processes, but it can also be costly to staff accountants familiar with specific computerized accounting software and programming.


When it comes to cost comparison, implementing a computerised accounting system can be a costly exercise. However, once set up correctly, modern automated accounting systems have the advantage of reducing the accounting staff payroll bill as much of the tasks previously performed manually are being taken over by computers.
Please feel free to contact Accounting Avenue for more information on any of the above. Our staff are qualified to assist in setting up and/or maintaining automated accounting systems that comply with latest global trends and current tax legislation. We take care of all your accounting and tax needs enabling you to focus on your business.