An investigation into the comparative use of Manual and

Computerized Accounting systems. Case of Masvingo Accounting

Firms

A research paper

By

DR BENIAS MAPEPETA

National University of Science and Technology (NUST)

Graduate School of Business (GSB)

Cell: +263 775783024/776032832

Email: mapepeta@gmail.com

REJOICE MANDIZVIDZA
Great Zimbabwe University (GZU)
P.O. Box 1235
Masvingo
Cell: 0715920302/0772935194

Email: rmandizvidza@gzu.ac.zw
ABSTRACT

In accounting, the financial dealings are chronicled, administered and presented to produce

fiscal reports that are useful to the person who reads, in making conclusions. Traditionally,

bookkeeping was done by hand, by a trained bookkeeper, by the use of records, interpretation

books, receipts etc. But by the emerging knowhow, nowadays, computerized book-keeping

remains in fashion, due to its accurateness, expediency and promptness. This research is a

comparative study investigating the use of manual accounting compared to computerized

accounting. The objective of this study was to find out the extent to which computerized

accounting is being practically applied as compared to the manual accounting systems. The

study population were the accounting firms in Masvingo urban, the partners and clerical staff of

these organizations.Questionnaires were used for the five targeted accounting firms in Masvingo

urban. From each firm, two participants (One partner and one Clerical) were sampled totaling

10 participants. The researcher found out that despite prevalence of modern technology, some

firms still have areas where manual accounting systems are still being practiced. The

researcher therefore recommended that computerization of accounting systems should be

systemized in all accounting firms.

Key words: comparative, manual accounting system, computer accounting system

1. Introduction

In accounting, the financial dealings are chronicled, administered and presented to

producefiscalreports that are useful to the person who reads, in making conclusions.

Traditionally, bookkeeping was done by hand, by a trained bookkeeper, by the use of records,

interpretation books, receipts etc. But by the emerging knowhow, nowadays, computerized book-

keepingremains in fashion, due to its accurateness, expediency and promptness.

1.1 Background to the study

According to Surbhi (2018), Manual Accounting, as the name signifies, is the manual accounting

system, in which periodical and ledger journals, receipts, book-keeping books are used to store,

categorize and scrutinize financial dealings of an organization. It is often used by small

businessmen, such as sole proprietors, shopkeepers, etc. to maintain the record of the business

transactions, due to lower cost.

One of the advantages of the manual accounting system is its easy accessibility. It is

also characterised by confidentiality, which makes the sensitive information hacking free.

Nevertheless, manual accounts can only be prepared correctly if the accountant possesses good

knowledge of bookkeeping and accounting.

Moreover, human error, such as incorrect recording of the transaction, the omission of the

transaction, figure transposition and so forth, is likely to occur while the preparation of manual

accounts which cannot be ignored.

Surbhi (2018 avers that High-techBook-keeping can be described as the book-keepingstructure

that find use of the computer system and pre-packaged, customized or tailored accounting soft

platforms, to keep a documentation of monetarydealings and generate financial declarations, for

analysis.

Computerized Accounting system relies on the concept of a database. The accounting database is

systematically maintained, with active interface wherein accounting application programs and

reporting system are used. The two primary essentials are:

 Accounting framework: The framework comprises of principles and grouping structure

for maintaining records.

 Operating procedure: There is a proper procedure for operating the system so as to store

and process the data.

Further, it requires front-end interface, back-end database, database processing and reporting

system to store data in a database-oriented application.

The merits of computerized accounting rely on its speed, accuracy, reliability, legibility, up-to-

date information and reports etc.

1.3 Statement of the problem

Both physical and electronic system is created on the same values, pacts and notions of

accounting. Though, they fluctuate only in their apparatus, in the logic that physical accounting

make use of pen and paper, to record dealings, whileelectronic accounting makes use of

computers and internet, to recorddealingsby electronic means.

1.4 Research objectives

The objective of this study is to find out the comparability use manual accounting systems and

the computerized accounting systems.

2. LITERATURE REVIEW

The purpose of this literature review is to ensure that researchers do not duplicate work that has

previouslyexisted. It providedsigns as to someplacewhere future investigation is directed or

endorseparts on which to focus on (Punch, 2014). This Literature review highlightedmain

findings, and it identifies discrepancies, openings and inconsistencies in the literature. It delivers

a positiveexamination of the practices and tactics of other investigators.

2.1 Theoretical framework

This study was hinged on the Technological Acceptance Model (TAM) by Davis (1989).

2.1.1 Davis (1989) Technology Acceptance Model (TAM)

The technology acceptance model (TAM) remains an information systemsnotion that replicates

how consumersgot to adapt and use a tool. The idealadvocates that when users are offered with

aninnovative technology, several factors impact their decision about how and when they will use

it, for example:

 Perceived usefulness (PU) –Davis (1989) say, is "the degree to which a person believes

that using a particular system would enhance his or her job performance".

 Perceived ease-of-use (PEOU) – Davis defined this as "the degree to which a person

believes that using a particular system would be free from effort" (Davis 1989).
Continuously being studied and expandedthe TAM has been having two major upgrades, the

TAM 2 (Venkatesh & Davis 2000 & Venkatesh 2000) and the Unified Theory of Acceptance

and Use of Technology (or UTAUT, Venkatesh et al. 2003). A TAM 3 has also been projected in

the setting of e-commerce with an inclusion of the sound effects of trust and apparent risk on

system use (Venkatesh & Bala 2008). This model was connected to this study in that the getting

and acceptance of supercomputers by accounting workers has to be established on the perceived

usefulness and the perceived ease of use.

3. RESEARCH METHODOLOGY

This quantitative research used questionnaires as research instruments to collect data for this

study. The research instruments were administered on 10 sampled participants from a target

population of 50 participants from purposively selected five accounting firms.

After pilot tested instruments on participants other than the sampled respondents, the researcher

personally administered the instruments to the actual respondents. After collection of data it was

presented, interpreted and analysed by the researcher through the use of frequency tables and

graphs.

4. RESULTS AND FINDINGS

The demographic data was of no relevance to the objective of the study. The results were

thematised and interpreted in order to have synchronic discussions

4.1 Responses on the Comparison between Manual accounting and computerized systems
The data findings of the difference between manual and computerized accounting is explained

below in points as processed responses from participants:

Manual Accounting
40%

Computerised Accounting Manual Accounting

60% Computerised Accounting

Figure 4.1 Meaning of both manual and computerized accounting

Figure 4.1 above shows that Four (4) 40% of the respondents emphasized thatManual

Accounting is a system of accounting that uses physical registers and account books, for keeping

financial records.Six (6) 60% of the respondents suggested thatComputerized Accounting is an

accounting system that uses an accounting software, for recording financial transactions

electronically.Manual Accounting refers to the accounting method in which physical registers for

journal and ledger, vouchers and account books are used to keep a record of the financial

transactions. On the other hand, computerized accounting implies the method of accounting,

which uses an accounting software or package, to record the monetary transactions, which

happen to an organization.
Table 4.1 Manual Recording and Computerized Recording

RESPONSES FREQUENCY PERCENTAGE

Manual Accounting 3 30
Computerized Accounting 7 70
TOTALS 10 100

Table 4.1 above shows that on Recording 3(30%) despondents say Recording is possible through

book of original entry while 7(70%) respondents Data content is recorded in customized

database. In manual accounting, recording of the transaction can be done through the book of

original entry, i.e. journal day book. Conversely, in computerized accounting, the transactions

are recorded in the form of data, in the customised database.

Series 1

0
Manual Accounting Computerised Accounting

Figure 4.3: Calculations

Fig 4.3 above shows that on Calculation8 (80%) of the respondents say that all the

calculationsare performed manually.Two (2) (20%) sayonly data input is required, the
calculations are performed by computer system.In manual accounting, all the calculations, i.e.

addition, subtraction, etc. with respect to the transactions are performed manually. In contrast,

in computerized accounting, there is no need to perform calculations, as the calculations are

performed by the computer automatically.

Table 4.2 Speed

RESPONSES FREQUENCY PERCENTAGE

Manual Accounting 5 50
Computerized Accounting 5 50
TOTALS 10 100

Table 4.2 above shows that on Speed of processing, 5 (50%) said manual accounting is

verySlowwhile 5(50%) said computerized accounting isComparatively faster. Thus,in manual

accounting, a person remains involved all the time, with the accounts, to enter and update

transactions, which is tedious and time-consuming too. As against, in computerized accounting,

once the transaction is entered, it is automatically updated in all the accounts to which it relates

and thus, the process is comparatively faster.

 Computerised accounting

Manual Accounting

0 1 2 3 4 5 6 7 8 9

Figure 4.3 Entries adjustment

Fig 4.3 above shows that on Adjusting entries2 (20%) saymanual accounting is made for

rectification of errors while 8 (80%) sayit cannot be made for rectification of errors.In manual

accounting method, if there occurs an error while entering and posting the transaction in the

books of accounts, then adjustment entries can be passed, for getting accurate results. Moreover,

adjustment entries are also made to comply with the matching principle, i.e. the expenses of the

accounting period should match the respective revenues. On the other hand, in computerized

accounting, to comply with the matching principles journal and vouchers are prepared, but

adjustments entries are not passed for rectification of error unless the error is an error of

principle.

Table 4.4 Backing up

RESPONSES FREQUENCY PERCENTAGE

 Manual Accounting 3 30
Computerized Accounting 7 70
TOTALS 10 100

Table 4.4 above shows that on Backup3 (30%) say backing up isNot possible while 7 (70%)say

with computerized accounting, entries of transactions can be saved and can be backed up. One of

the merits of computerized accounting which manual accounting lacks is that in manual

accounting there is no way to back up all the entries and financial statements, but in

computerized accounting, the accounting records can be saved and backed up.

Sales

Manual Accounting

Computerised Accounting

Figure 4.4 Preparation of statements

Fig 4.4 above shows that on preparation of the Trial Balance 4 (40%) say it isprepared when

necessary while 6 (60%) sayinstant trial balance is provided on daily basis.Manual Financial

Statementare prepared at the end of the period, or quarter while with computerized accounting, it

is provided at the click of button.In manual accounting, the trial balance is prepared only when it
is required, whereas, in computerized accounting, instant trial balance is provided on a daily

basis.In a manual accounting system, the financial statement is prepared at the end of the period,

i.e. financial year. On the contrary, the financial statement is provided at the click of a button, in

the computerized accounting system.

5. Conclusions/Recommendations

The majority responses indicated that as the number of business transactions increases, it is

difficult to manage accounts manually, as it takes a lot of time to update a single transaction in

all the accounts that it affects. In computerized accounting, a number of limitations of the manual

accounting have been removed. Whenever the transactions occur, the entry is made and it is

updated automatically in all the accounts that it affects, in the computerized accounting. The

researcher therefore recommends computerization of all accounting systems because of the

expressed advantages stated.

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