Owners and other stakeholders of any business, whether large or small, want to know whether the business is making a profit or not. Many small businesses do their accounting manually and they are happy with this setup. Others may be considering using a computerized system, since accounting software is also affordable these days. Manual and computerized accounting systems perform basically the same processes; the accounting principles and concepts are the same with differences lying in the mechanics of the process. Let us now see the difference between these two:



The main difference between manual and computerized systems is speed. Accounting software processes data and creates reports much faster than manual systems. Calculations are done automatically in software programs, minimizing errors and increasing efficiency. Once data is fed into the system, one can create reports literally by pressing a button in a computerized system.



Another difference between manual and computerized systems is cost. Manual accounting with paper and pencil is much cheaper than a computerized system, which requires a machine and software. Other expenses associated with accounting software include training and program maintenance. Expenses can add up fast with costs for printers, paper, ink and other supplies. However, manual accounting requires more staff. Therefore, more expenditure on salaries/wages in case of manual accounting.



A third difference between manual and computerized systems is the ease of backup of a computerized system. All transactions can be saved and backed up, in case of fire or other mishap. You cannot do this with paper records, unless you make copies of all pages - a long and inefficient process.

The following table makes a further attempt to explain the difference between the manual and computerized accounting systems:






Manual Accounting is a system of accounting that uses physical registers and account books, for keeping financial records.

Computerized Accounting is an accounting system that uses an accounting software, for recording financial transactions electronically.


Recording is possible through book of original entry.

Data content is recorded in customized database.


All the calculation is performed manually.

Only data input is required, the calculations are performed by computer system.



Comparatively faster.

Adjusting entries

It is made for rectification of errors.

It cannot be made for rectification of errors.


Not possible

Entries of transactions can be saved and backed up

Trial Balance

Prepared when necessary.

Instant trial balance is provided on daily basis.

Financial Statement

It is prepared at the end of the period, or quarter.

It is provided at the click of button.


Mayank Rai

Hi, My name is Mayank Rai. I found that Blogging is an easiest way to share your knowledge with everyone & learn something new from there.

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