Accounting is the process of maintaining the financial accounts of a business or organisations every financial year for the audits and the entry of data to record financial accounts monthly, quarterly, or annually, either handwritten manually or computerised using certain accounting software. Due to modern techniques, nowadays most of the accounts are done through computer software. Only a few small businesses and companies use manual accounts today. Simply put, the two ways through which an accountant can maintain the financial accounts of a company are Manual Accounting and Computerised Accounting.
The process in which the accountants prepare paper-based handwritten accounts in a register in the form of ledgers, subsidiary books, and journals to record the financial transactions is called Manual Accounting. Manual accounting is time taking process, and it is not quickly done. The chances of human error in recording the data are high in manual accounting, and it needs an employee to perform such a job. It is also cost-effective and may not require any highly expensive equipment, like computers. The data is much more secure and protected against all cyber attacks or online thefts, as it does not require the internet.
The process in which the financial accounts are systematically accounted for using specially developed computer accounting software automatically in the form of PDF, Tally, and Excel spreadsheet documents is called Computerised Accounting. It is a very quick process, as everything is systematically automated using accounting software. It requires a computer and an operator to perform such operations. The chance of having any calculation error is very less or null, and it gives precise output as the software is designed with full automation like auto entries, organised framework, calculations, etc. It helps in maintaining the financial records and all transactional information easily and produces account statements, tax liabilities, and other financial reports, which can be used to analyze the company’s operations, etc.
