Question

Research assignment:

You are a junior accountant in a rapidly expanding firm that is still using a manual accounting system. Your manager, the accountant has indicated that it was probably time for the firm to migrate to using electronic accounting. You were therefore given the task to present a paper at the next staff meeting on the pros and cons of your firm using accounting software in the near future.

You are also required to write this paper in an essay form, listing references of where you obtained your information. Failure to comply with the requirements, automatically gains you a zero in this assignment.

Answer 1

Most companies use manual or computerized accounting to track expenditures and income. Assets, liabilities, revenue, expenses and equity must be documented and transferred to a general ledger containing the company’s financial details. Such information may be analyzed to help business owners make future financial decisions, using the advantages of either manual or computerized accounting.

The Advantages of Manual or Computerized Accounting

Time

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

Accuracy

Computerized accounting has the advantage of higher accuracy when compared with 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 Center.

Reliability

The advantages of manual or computerized accounting systems may be equal when it comes to reliability. Manual accounting can function independently of machines so that work continues when "the system" isn't working. 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 adept 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. In this 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.

Reporting

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.

Staffing

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.

Cost

When it comes to cost comparison, the advantages of manual accounting systems are clear. Computerized systems can cost millions of dollars to purchase, implement and maintain. It may be necessary to purchase updated software with some regularity.

Disadvantage:-

Initial Cost

Despite many advantages, one disadvantage of computerized accounting is the initial cost of establishing the system. While the price of computers has fallen dramatically year after year, accounting software remains expensive and can cost thousands of dollars.

Sources:-
https://bizfluent.com
https://smallbusiness.chron.com