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Traditional Accountins and Computer Accounting

Accounting is a necessary function for any business. All businesses must keep a record of their income and expenses, and the records should be as detailed as possible. For some, the idea of spreadsheets, general journal books and ledger sheets is frightening. For these people, computerized accounting could be a welcome relief. Conversely, others enjoy the manual process of posting to ledgers, journals and worksheets. The process you choose is completely up to you.

Manual Accounting
A manual accounting system requires the acting accountant or bookkeeper to post business transactions to the general journal, general ledger and worksheet by hand. This process can be completed by either using actual paper journal and ledger sheets or by creating these sheets in a computer program such as Excel. It is considered manual because each transaction is entered into the system individually.
 Computerized Accounting
A computerized accounting system allows the user to enter the transaction into the program once, and all accounts are updated as necessary. For example, if your business buys $1,000 worth of office supplies with a combination of $500 cash and $500 credit, instead of going to each accounting and posting the transaction, with a computerized system you would check office supplies, cash and the selected account payable account and the transactions automatically would post to the accounts.
Speed and Accuracy

Computerized accounting programs are quicker as far as entering information is concerned. However, even with the built-in error detection of computer programs, sometimes it is easier to cross-check journals ledgers in a manual system since you can flip to the pages you need, and even spread the books out on a table if needed.
End-of-Period Reports

Computerized accounting packages will automatically pull all relevant ledger entries for the period reports. Manual accounting takes longer, but can help a bookkeeper better understand the posting and end-of-period process. This is one reason why accounting students cannot take a computerized accounting course until beginning and intermediate accounting classes are completed.
Data Manipulation
With a computerized accounting system, information for a particular period of time can be compiled quickly. With a manual system, it can take time to locate the information from each book and compile it into a report.
Things to Consider
If you are not good with figures and accounting frightens you, and hiring a bookkeeper or accountant is not an option, a computerized system will make record keeping easier. For people who are comfortable working with an accounting system, either a manual or computerized system would be fine, but the computerized system offers the benefit of speed. If you are old-fashioned and just prefer having the actual paper books, you can use a computerized accounting system just to print out the journal and ledgers, creating the best of both worlds.

1 comment:

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