Computerized Accounting VS Manual Accounting: What’s Best for Your Business?

July 11, 2021Dated:  | |

Accounting, whether manual or computerized, is very important for any successful business regardless of its size. Accounting the company’s financial information not only helps record and report the transactions but also enables the effective analysis of one’s financial position so as to determine steps to be taken for the progress of the same. As technology improved, accounting methods have also been transformed in order to make the ordeal simple, effective, and precise. Whilst traditional accounting depended on books and ledgers for their bookkeeping, innovative technologies have introduced computer-based and cloud-based (Online) accounting software which has rapidly replaced the traditional system of accounting.

Manual accounting systems use books, journals, and paper ledgers to record their financial information and require the tedious process of writing and calculating. Although manual accounting is effective for small businesses due to it being simple and cost-effective, computerized accounting is much more time-efficient, accurate, and error-free.

Here are a few reasons why Manual Accounting is being replaced by Computer Accounting:

  • Speed: Unlike Manual Accounting, Computer- Based or Cloud-Based accounting provides not only faster data entry, but also faster computing and report analysis.
  • Easier Analysis of Data: Computerized accounting helps analyze the data easily as its automated system sorts and arranges the required information enabling efficient analysis of information
  • Precision: Computerized accounting is more accurate and less prone to errors as specific information is entered in required fields which are calculated automatically. This not only ensures the precision of the report but also helps save time fixing the errors that could have happened during manual computing.
  • Efficiency: Computerized accounting is automated which increases the efficiency of data interpretation. Unlike manual accounting which requires hard labor of data entry and calculations, computer-based accounting software enables automatic updating of reports and databases.
  • Easy to Setup: Unlike Manual Accounting which requires shelves and ledgers to be arranged and organized periodically, computerized accounting is easy to install, set up, and use.
  • Save Space: Computerized accounting helps save space as it allows to keep a large data safely in the system, unlike Manual Accounting that requires many books/ledgers to be kept organized.
  • Data Security: The records are safer and more secure with computer-based accounting as only the authorized people have access to the system. It also minimizes the chances of data loss as records are backed up into the system/ the cloud with suitable security measures to avoid data loss.
  • Editing the Errors: Computerized accounting helps edit the records and thus corrects any errors in the data entry.
  • Ensure Compliance: Computerized accounting helps analyze the data precisely and ensures that the records are compliant with the VAT laws and regulations.
  • Helps in Auditing: Computerized accounting gives a perfect report of the financial position of a company, allowing one to find any transaction with a simple click. This makes auditing faster and more effective.


Although computerized accounting has its perks of higher cost and better training, it makes accounting easy, time-efficient, and precise.