Computerized Accounting Software Vs. Manual Accounting
Proper account management is vital for the success of any business or company. There are two systems in which companies can choose to manage their accounts- that is manual and computerized software accounting. Manual accounting entails the use of manual labor to compute and record company or business transactions to the worksheet, general ledger, and general journal. Computerized software accounting, on the other hand, refers to the use of a software program that updates the accounts once business transactions are fed.
There are several major differences between manual and computerized software accounting. Businesses can choose to use either one of them to managing their commercial transactions. For the businesses who intend to use computerized software accounting, MYOB can be a very helpful software to start with when it comes to accounting. Of course, the software requires a bit of understanding and familiarising with the interface. So companies can consider taking up an MYOB course in Singapore to further maximise the capabilities of the software.
The major differences between manual and computerized accounting systems include:
Provision of financial statements: In manual accounting, company accountants require trial balance to prepare the periodical financial statement. For computerized software accounting however, financial statements are easily generated by the software system itself so that business owners and accountants do not need to have trial balance in advance.
Recording of the financial statements: Recording process requires computing mathematical functions manually and putting them down in paper copy as well as posting them on ledger or books of original entry. Computerized software accounting performs the mathematical functions through internal data computation process as long as the right data information was fed into the software.
Rate of accounting computation: Computing the transactions in manual accounting is slower since it requires a stage by stage calculation by use of human mind and hand. Computerized software accounting is much faster in computing the transactions since the software automatically processes the data once it is fed, or the software is commanded.
Backup retrieval: For manual accounting retrieving financial records might be tedious and tiresome since it might involve looking for various paper documents for reference. Computerized software accounting easily retrieves the backup information since accountants or business owners only have to click on the saved financial records to get the ones they need.
Ease of classifying accounting statements: for manual accounting, prior to ledger accounts preparations, the transactions have to be recorded in the books of original entries. In computerized accounting software, the software classifies different financial statements automatically, and business owners or accountants can easily classify financial statements they require at any moment.
Financial Records Accuracy: For Manual accounting records to be accurate, accountants and business owners have to be very careful and highly competent to compile the financial report accurately. With computerized software accounting, as long as you have the correct data and software commanded to perform, accurate financial statements will be produced.
Manual accounting financial records can be used easily for review. The corrections and adjustments can also be easily made. In computerized software accounting, the review of financial statements is quick, and the understanding of its computation can be achieved by carefully examining the financial formula.
Manual and computerized software accounting can both produce accurate financial data as long as the correct procedures are followed. Programs such as MYOB can be very effective to business owners who choose computerized software accounting to timely and accurately compile financial data.