Essays: The benefits, shortcomings, and comparison of manual and computerized accounting

Today, accounting is changing substantially due to the introduction of new technologies. In this respect, computerizing of accounting is particularly significant because it changes accounting substantially and contemporary accounting tends to become more and more computerized, compared to the conventional accounting of the past, when accounting was manual. However, it is worth mentioning the fact that manual accounting persists but, today, manual accounting is rather rudimentary than widely-spread, while, in the future, it is likely to be totally replaced by computerized accounting. This trend can be explained by numerous advantages of computerized accounting compared to manual accounting, but, in actuality, both manual and computerized accounting have its own advantages as well as shortcomings.

First of all, it should be said that manual accounting is quite reliable since it has persisted for decades and centuries and changes that occurred to manual accounting did not deteriorate the reliability and effectiveness of manual accounting. In addition, manual accounting is not vulnerable to technical problems which may be provoked by malfunctioning of computers or networks as is computerized accounting (Breneman & Taylor, 1996). Furthermore, manual accounting can be applied in practically any region of the world, regardless of the level of its technological progress. In such a way, due to its relative simplicity, manual accounting can be widely applied even in the contemporary business environment.

On the other hand, manual accounting is extremely difficult to apply in large companies. For instance, contemporary multinational corporations can hardly afford manual accounting because they cannot process all the data using manual accounting solely. In addition, there is always a risk of error that can be made by human accountants, which is quite natural to humans. Finally, it is worth mentioning the problem of the processing of accounting information since it is very difficult to process this information and use in the development of a company’s strategy, when manual accounting is applied, because data cannot be adequately processed with the help of computers.

In this regard, computerized accounting is apparently in an advantageous position because it can process large amount of information and data much faster and efficiently than manual accounting does. In fact, the speed and scope of computerized accounting are probably major advantages of computerized accounting compared to manual accounting (Blanchard & Bowles, 1993). This is why computerized accounting is widely used in large multinational corporations and, today, many smaller companies start using computerized accounting instead of manual one. In addition, often, computerized accounting turns out to be more cost efficient than manual accounting because more data can be processed in shorter terms and less accountants are needed.

However, computerized accounting has a number of drawbacks. In this respect, the risk of information breaches is probably one of the most serious drawbacks because accounting information can become available to third parties, including competitors that can threaten to the position of a company in the market (Garvin and Artemis, 1997). Furthermore, there is a risk of technical problems, such as shut down of the system, especially in case of some emergency. As a result, the accounting information of a company can be under a threat.

Thus, taking into account all above mentioned, it is possible to conclude that both manual and computerized accountings have their own drawbacks and advantages.

Nevertheless, both manual and computerized accountings persist in the contemporary business environment, in spite of rapid progress of technologies, but computerized accounting tends to steadily replace manual one.

Blanchard, K. & Bowles, S. (1993). Raving fans: A revolutionary approach to customer service. New York: Morrow.
Breneman, D. W., & Taylor, A. L. (eds.). (1996). Strategies for promoting excellence in a time of scarce resources. San Francisco: Jossey-Bass.
Garvin D. A. and Artemis M. (1997, November). A Note on Knowledge Management, Harvard Business School Case Study.

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