Manual vs. Automated Bookkeeping Systems-Which is Best?

There are many advantages to both manual and automated bookkeeping systems, your personal preference will dictate which is right for your business. But does one system offer more benefits than the other?

Manual Accounting is it for you?

A manual accounting system is where the bookkeeper or your accountant records any business transactions into a ledger by hand. They can use either a paper ledger or log book by creating sheets in an Excel format for example. The reason it is called manual is because the process is recorded individually by hand.

If you trust your bookkeeper implicitly and know they are accurate and reliable then manual bookkeeping may be the way forward. You can choose a single entry or dual entry system depending on the size of your business and your requirements. The bookkeeper will know exactly what they have logged and have a great insight when explaining the process to other members of staff. It is also a fail-safe way to ensure, if your computer systems went down, there is no need to panic as everything has been logged and all figures are safely tucked away in the ledger.

But what happens when your bookkeeper is on leave – do you have someone else to record the information so you don’t fall behind? Would it be easier to have a computerized automated bookkeeping system which is simple to use and explains everything to you as you go along?

Automated Bookkeeping

An automated bookkeeping system allows users to enter any transactions into the program just once, then accounts are updated automatically. An automated system checks supplies, cash incomings and outgoings and transactions. You don’t have to do much as the computerized process checks it all for you.

You can check the ledger details by time periods, say you were looking to bring up records from September 1st – 30th you simply type in the dates and all of your transactions for those dates will appear on your screen. It is an accurate way to bookkeep, it detects any errors and any figures which have been logged incorrectly. If you need to take reports to a meeting, or put files together for your company tax returns, then it is easier to print off the pages for the time period you need. With a manual system, even with the most experienced bookkeepers they would need to locate the dates, and information required and compile it manually into a report format. It can be time consuming and if you are working to a deadline it can put a lot of pressure on your bookkeeper.

If you are not a ‘figures’ person by nature and anything to do with accounting scares you,you could hire a bookkeeper to look after things for you, whether they work on a manual system or input everything into your automated process.

Realistically, the best of both worlds would be an ideal solution – using an automated bookkeeping system to create the records, then print off an additional copy and place it in a manual ledger, you then have a backup for all transactions and reports and everyone will be aware of the process.