Why do some people still prefer the Manual System in their business?

Actually, a business has the option of using a manual accounting system, keeping their financial records by hand. A business also has the option of using a computerized accounting system, keeping their financial records with the aid of a computer and software package. 

However, In most developing and Arab countries, budget execution and accounting processes either manual or supported by very old and inadequately maintained software applications. E.g. The consequent lack of reliable and timely revenue and expenditure data for budget planning, monitoring, expenditure control, and reporting has negatively impacted budget management.

Yet, it is not surprising that many banks, companies and corporations  have pressed for, or have been pressed into, adopting financial management information system (FMIS) while it has many advantages and also disadvantages .

First: Advantages and disadvantages of a manual accounting system

Advantages:

1-Manual accounting systems are most commonly used by small businesses due to lower upfront cost less than complex accounting software and are relatively easy to use.

2-New or small businesses may not have many financial entries to make and, therefore, their accounting needs are simple.

3-As long as the person in charge of manually keeping the financial records knows what he or she is doing, it can be just as accurate as a computerized accounting system.

4-Another advantage of using a manual accounting system is that you can always open up the book and gain instant access to your records.

5-There is no delay due to power or Internet outages, and there are no risks of sensitive information being hacked online.

Disadvantages:

1- Accounting, for any business, can be a complex undertaking. A manual accounting system requires you to understand the accounting process in a way that may be unnecessary with a computerized accounting system. This can be an advantage or a disadvantage, depending on the person doing the bookkeeping; often, a specially trained professional is needed to ensure that accounting is done properly.

2-Unraveling the complexity of financial records by hand may be time consuming. Since it takes time to generate reports, you may be neglecting other aspects of the business and miss opportunities for growth.

3-Prone to Human error also plays a role in inaccurate financial records; manual accounting can be tiresome and tedious, causing bookkeepers to make mistakes.

4-Additionally, records may only be available in paper format, which can cause issues if they are lost, stolen, or damaged

Second: The advantages and disadvantages of computerized accounting system

Advantages:

• Faster and efficient in processing of information;

• Automatic generation of accounting documents like invoices, cheques and statement of account;

• With the larger reductions in the cost of hardware and software and availability of user-friendly accounting software package, it is relatively cheaper like maintaining a manual accounting system;

• More timely information can be produced;

• No more manual processing of the data- all automatically been posted to the various ledgers/accounts and Many types of useful reports can be generated for management to make decisions

The disadvantages:

• Power failure, computer viruses and hackers are the inherent problems of using computerized systems;

• Once data been input into the system, automatically the output are obtained hence the data being input needs to be validated for accuracy and completeness, we should not forget concept of GIGO (Garbage In(Input) Garbage out ( Output) and

• Accounting system not properly set up to meet the requirement of the business due to badly programmed or inappropriate software or hardware or personnel problems can caused more havoc and

• Danger of computer fraud if proper level of control and security whether internal and external are not properly been instituted.

From my own view, either a business uses manual or computerized system , each has many merits and demerits, nevertheless one important matter making the difference is the technical or expertise skills of auditors.

first cost

second they didn't have a perfect or computerized manpower to do it

some owner need work on this way

Atomization always bring ease at work, world is going towards computerization, with less paper work, if we do not adopt this we will be lagging far behind.

I guess that parsimony has dominated the business owners who can buy that accounting systems

Thanks for the invite I agree with the answers relevant experts

Normally people use manual because of their business is small and they don't have idea about computer. when their business grows up, they cannot make it to move manually with out error. at that time, they will forced to move for computerized system

Speed and Accuracy

Computerized accounting programs are quicker as far as entering information is concerned. However, even with the built-in error detection of computer programs, sometimes it is easier to cross-check journals ledgers in a manual system since you can flip to the pages you need, and even spread the books out on a table if needed.

End-of-Period Reports

Computerized accounting packages will automatically pull all relevant ledger entries for the period reports. Manual accounting takes longer, but can help a bookkeeper better understand the posting and end-of-period process. This is one reason why accounting students cannot take a computerized accounting course until beginning and intermediate accounting classes are completed.

Data Manipulation

With a computerized accounting system, information for a particular period of time can be compiled quickly. With a manual system, it can take time to locate the information from each book and compile it into a report.

Things to Consider

If you are not good with figures and accounting frightens you, and hiring a bookkeeper or accountant is not an option, a computerized system will make record keeping easier. For people who are comfortable working with an accounting system, either a manual or computerized system would be fine, but the computerized system offers the benefit of speed. If you are old-fashioned and just prefer having the actual paper books, you can use a computerized accounting system just to print out the journal and ledgers, creating the best of both worlds.

A manual accounting system requires the acting accountant or bookkeeper to post business transactions to the general journal, general ledger and worksheet by hand. This process can be completed by either using actual paper journal and ledger sheets or by creating these sheets in a computer program such as Excel. It is considered manual because each transaction is entered into the system individually.

Computerized Accounting

A computerized accounting system allows the user to enter the transaction into the program once, and all accounts are updated as necessary. For example, if your business buys $1,000 worth of office supplies with a combination of $500 cash and $500 credit, instead of going to each accounting and posting the transaction, with a computerized system you would check office supplies, cash and the selected account payable account and the transactions automatically would post to the accounts.

Regards,

Saiyid

Because they lacks IT skills....................... 

Thanks for the invite ................. agreed with the answers Mr. Ahmed

agree with answers >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>