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Compare the benefits of using manual and computerised accounting systems to record business transactions

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Introduction

BTEC Business Level 3- Accounting Systems Unit 8 [P3, M1,] ________________ [P3] explain the benefits of using a computerised accounting system [M1] Compare the benefits of using manual and computerised accounting systems to record business transactions Computerised accounting Computerised accounting is a system which enables the user to enter the transaction into the program once and all accounts are updated as necessary. For example if the business buys £2000 worth of office supplies with a combination of £1000 cash and £1000 credit instead of going to each account and posting the transaction. A computerised system will just check office supplies, cash and the selected account payable account and the transactions automatically would post in the prospective accounts. ...read more.

Middle

Power failure 2. computer viruses and hackers are the inherent problems of using computerised accounting 3. 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, 4. 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 know as GIGO (garbage in garbage out). 5. Danger of computer fraud if proper level of control and security whether internal and external are not properly been instituted. Manual accounting Manual accounting is a system which needs the accountant or bookkeeper to post business transactions to the general ledger and worksheet by hand. ...read more.

Conclusion

ledgers are easy to review Images source: http://www.accounting-software-crm.co.uk/accounting-software---customer---demo-videos.html The print screen below shows the accounting software used by a small organisation. Disadvantages of manual accounting 1. Slower than computerised accounting 2. Error prone. Subject to human error along the way 3. Time consuming compared to computerised accounting D1] Analyse the circumstances under which a business would adopt a computerised accounting system instead of a manual one Analyse the circumstances under which a business would adopt a computerised accounting system instead of a manual one Manual accounting is used by small firms and for a small business to use computerised it is expensive. Businesses like Tesco are large firms which are global. They have different store around the world. It is impossible for them to use manual accounting because a large number of transactions have to be processed. ...read more.

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