Business Finance
Reporting Accounting Accuracy

Question Description

Imagine you are a consultant hired to convert a manual accounting system to an automated system. Suggest the key advantages and disadvantages of automating a manual accounting system. Identify the most important step in the conversion process.

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Final Answer


Automatic Document Production- Invoices,purchase orders and payroll documents,printing statements are done automatically . 

Speed - The data entry work such as supplier details , stock records and the database of the customers can be modified and updated at a very fast rate when compared to manual accounting . 

Cost Savings - It results in cost savings as lesser number of staff can do more work in less amount of time and since the accounts are error free and up to date the auditing expenses get greatly reduced .

Efficiency - The overall efficiency of the company increases as the time and resources are utilised in a very efficient manner . 

Availability of Information - Data can be made available to users at different places within a very short amount of time .

Calculation errors reduced - The errors due to calculation are reduced to nil ( except ehen the staff enter the wrong values ) and thus saves time and energy which would have been used for rechecking . 


Staff Training - The staff will require training in order to use the softwares . This may require money and time for the sake of tutoring . 

Human errors ( value input )  - Even though the automated system does the calculations correctly , it still depends on the staff for the input of values . So there is still some amount of human dependency .

Reliance on Technology - If the system suddenly went down due to some hardware or software failure then it will cost a lot of money as the work will not get completed in time .

Prone to hacking - System may be hacked by people in oreder to cause disruption and loss of money or for their personal gains . 

i would say staff training is the most important factor here because if staff are not trained to deal with situations such as system failure and correct software usage it may cause several problems to the company and user .  The staff should be able to handle any situation which arises at that moment . 

warrenc (144)
Cornell University

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