The Steps Of Manual Accounting Systems Accounting Essay

Harmonizing to Yumi Sera and Susan Beaudry, ( 2007 ) Financial systems aid and advise an organisation ‘s planning and action programs. Financial System is of import to Bintang sdn bhd because fiscal systems help the organisation to do sound determinations based on hard currency i¬‚ow and available resources and besides it path and pull off the resources required to successfully complete work. Accounting is an of import portion of every company. Bintang Sdn Bhd. has to uncover certain fiscal and direction information to the external and internal users. Furthermore, accounting is a necessary tool in concern decision-making procedure. From this point, there are two constructions of fiscal system in fixing the fiscal statement, which consists of Manual Accounting System and Computerized Accounting System. These two accounting system get to assist an hearer to make an review or look intoing on the leger, diary, and cashbook in order to avoid an mistake.

Manual accounting implies that employees carry out the full accounting rhythm manually on a periodic footing which they prepare test balances, journalize minutess, prepare fiscal statement studies and other modus operandis. Manual Accounting takes more clip than other method. Manual accounting systems utilize several paper legers to enter fiscal minutess. Companies have separate legers for each portion of the accounting system, such as histories collectible, histories receivable and gross revenues. Accountants so consolidate these legers into one general leger, supplying the balance for each leger. The general leger notebook assists in making fiscal statement.

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Manual accounting system implies that employees of Bintang Sdn Bhd execute the wholly accounting rhythm manually on a periodic footing. Harmonizing to the scenario, Ms Joan immediately prepares a listing of the hard currency and checks and a duplicate sedimentation faux pas. Cash and checks are deposited daily in the bank by Ms Joan. In add-on, she uses the listing to fix the hard currency grosss journal and update history receivable in the general leger system. This shows that Ms Joan did her work manually whereby she did the readying and update by manus.

The stairss of Manual Accounting System

Advantages of Manual Accounting

Manual accounting systems offers some benefits and advantages. The legers are easy to reexamine, and comptrollers can do simple alterations if indispensable and the single histories are easy resigned because information is in systematic order through each leger. Accountants besides have the benefit of physically managing each leger and making notes in client histories sing any issues that need elucidation or corrections.

The first advantage is independency from machines. This is because he machines is merely utilizing logic and can non be dependable if the anything when incorrect. Sometimes even when utilizing a computerized system, people who key in the informations still can makes a errors and the computing machine can non observe it. It becomes worst when it comes to a new employee who does non cognize how to utilize a computing machine. It is because they prefer to utilize a manual accounting system.

.Secondly is experient and adept forces handiness. For illustration, an hearer audits all paperss by utilizing all accomplishments and cognition in scrutinizing. These workers have been trained by the direction in order to avoid an mistake in readying of the fiscal statement. In add-on, the individuality of the individual come ining the informations can perchance be proven by the individual ‘s script. Through the grounds of individual ‘s script, it is easy for director to find who is accountable to do a rectification of mistake in these paperss. That individual will be responsible for mistakes or fraud.

The last advantage is clear and easy acknowledge. An hearer can supervise all minutess including diary, ledger, hard currency book and else easy because it has difficult transcripts of all records. Furthermore, ciphering figures, insert the inside informations, and composing down Numberss and minutess helps mind to retrieve all the inside informations and figures easy instead than typing in computerized accounting system. Therefore, Ms Joan may derive a greater apprehension through this manual accounting system because every measure is written by manus in paper system

Disadvantages of Manual Accounting

Meanwhile, there are few disadvantages for Bintang Sdn Bhd to see in keeping the manual accounting system. By utilizing this manual system, it can be clip devouring because an hearer has to travel Numberss from one study to another manually.

For illustration, Mr. Peter enquires Ms Joan to scrutinize on all the paperss of Bintang Sdn. Bhd. However, the Head of Internal Audit Department informed to Mr Peter that Ms Joan had persistently made several posting dealing mistakes in the accounting systems that it affects company ‘s fiscal statement. She did so by exaggerating figures in gross revenues, entering improper credits to enter history receivable and exaggerating receivable. This makes it hard for the hearer to do corrections because it takes clip for an hearer has to look into once more all the right figures and specifics in manually.

Computerized Accounting

Computerized accounting implies that the lone thing that employees do is entering minutess into the computing machine which processes the other stairss of accounting rhythm automatically or by a petition. But this is a really simplified position on the computerized accounting because dealing is a complex class which includes non lone gross revenues or acquisitions, but depreciation, premiums and rewards computation, dividends etc.

So computing machines provide accurate computations and smart studies but it takes much clip, resources and attempt excessively and it ‘s hard to measure which accounting type is more fast and economic. If manual accounting requires qualified comptrollers to maintain a record of concern minutess, computerized requires comptrollers which can utilize specific package and therefore they cost more.

Computer package calculates faster but it does non cognize what you need until you can clearly explicate what precisely you need. In add-on good computerized accounting system can be 1000s and even 1000000s dollars, depending on the complexness and the size of organisation.

Computerized accounting provides better internal control study system for any given period of clip, computing machine can command 1000s indexs at the same time and make presentments to the appropriate sections or workers if some indexs do non match to the normal province, while manual control takes more clip

Advantages of Computerized System

Computerized accounting offers several more benefits than manual accounting. Accountants process more information quicker and expressions verify calculated sums and mistakes are less common. Accounting systems besides are customizable by industry, leting comptrollers the chance to utilize preset templets for their general leger. Accountants besides can hive away several old ages of fiscal information with comparative easiness, giving them the chance to reexamine old twelvemonth ‘s information without screening through tonss of paper legers.

The first advantage of computerized accounting system is timesaving. It is sensible to state that a computerized accounting system is much faster than a manual accounting system as all the user has to make is come in the information into the computing machine. Then, the computing machine will do the computations, green goods, and publish out any studies, bills or recognition notes at a touch of a button. Therefore, it can salvage clip for comptroller to make the other occupation as good. Besides that, velocity and truth is increased by utilizing computerized accounting system. The chief benefit of the computerized accounting system is to transport out the processing phase quicker, more systematically and accurately than the manual accounting system.

These are few of the chief benefits of a computerized system as it is able to bring forth studies instantly for illustration client statements or more enhanced studies such as a hard currency flow analysis. In add-on, an mistake of computation will non go on by utilizing computing machine, unless if there is overstated, unostentatious, or misstatements of figures. Therefore, it shows truth by utilizing computerized accounting system because package of Microsoft Excel calculates all figures right.


The first disadvantage is that it is highly high costs. This is because a system must be updated, electrical charges, developing cost for staff to utilize the system efficaciously and many more. For illustration, Mr Peter must supply full preparation to Ms Joan in term of scrutinizing cognition and accomplishment and using it to the system. The intent of preparation is to avoid mistakes from happening.

Besides that, computerized accounting system can be affected by virus. There are so many viruses accessible presents that it may destruct the package and files in the system including informations and dealing. All the files in the system will be lost and it will impact the fiscal statement of Bintang Sdn Bhd every bit good. In add-on, sometimes power failure, dislocations or clangs may impact the system and informations loss may happen. Furthermore, computing machine hackers can be one of the factors that may impact the fiscal statement of Bintang Sdn Bhd. This unauthorised people can derive entree to a computing machine files and do amendments to those files.


As a decisions, Bintang Sdn. Bhd should used the computerized accounting system because the system brings a batch of benefits to the company. Now yearss, the bulk of companies will utilize a computerized accounting system for entering and showing their fiscal information. This system allows companies to enter concern minutess accurately and bring forth fiscal studies rapidly for direction reappraisal.

Besides that, it reduced velocity in utilizing manual accounting system. The ground is an hearer has to look into all the specifics and figures compared to utilizing a computerized system. In add-on, an hearer checks all the figures by utilizing reckoner manually while computerized system is automatically calculated by utilizing package such Microsoft Excel. Therefore, it reduces the velocity of plants for an hearer to look into the paperss and fix the fiscal statement as a consequence.

While the maps of manual accounting have changed, it will ne’er travel away wholly. Accountants must reexamine the information presented on fiscal studies from the accounting system and guarantee that it is accurate and valid. Accountants must besides guarantee that all fiscal information follows the Generally Accepted Accounting Principles and any other guidelines from regulative bureaus