EFFECTS OF MANUAL ACCOUNTING IN SMALL AND LARGE BUSINESSES

(BAYAMBANG BUSINESSES)

A Research Proposal
Presented to Dr. Alicia A. Peralta
Department of College of Accountancy and Business Administration
San Carlos City, Pangasinan

In Partial Fulfillment of the

Requirements for the Subject
Accounting Research Methods (Qualitative Research)
Academic Year 2023- 2024

By
Arcinas, Colyn Joy Q.

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 Table of Contents

Page
Title Page 1
……………………………………………………………………………………………………
Table of Contents 2
…………………………………………………………………………………………
I. INTRODUCTION 3
………………………………………………………………..
Problem Statement 3
………………………………………………………………………………
Context 5
………………………………………………………………………………………………
Research Question 8
………………………………………………………………………………
Significance of the Studies 8
……………………………………………………………………
II. REVIEW OF RELATED LITERATURE AND STUDIES 9
…………………….
Related Literature 11
……………………………………………………………………………….
Related Studies 15
…………………………………………………………………………………
III. RESEARCH METHODOLOGY 25
………………………………………………….
Sample 25
……………………………………………………………………………………………...
Data Sources 27
………………………………………………………………………………………
Data Gathering Procedure 27
…………………………………………………………………...

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 Intervention 27

………………………………………………………………………………………..

IV. FINDINGS AND INTERPRETATION OF

DATA…………………......... 29

V. RECOMMENDATIONS AND CONCLUSION

…………………............. 34

BIBLIOGRAPHY 36

I.INTRODUCTION

THE PROBLEM

Problem Statement

The role of accounting was beneficial, especially considering that businesses

cater to transactions of their services and products. This studied measures the

efficiency of used manual accounting in small and big businesses. That might been in

small retail stores and dealer companies. Accounting was an essential tool for

businesses to calculate expenditures, transactions and analyzing their data manually.

This procedure may been challenging, error-prone, and inefficient. Not only did

manual data entry used up a lot of valuable resources, but it additionally provides a

possibility of errors and misunderstandings. For your small or large businesses, even a

single error in the invoice amount or date might had major financial implications.

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 Many businesses used manual accounting on daily operations whereas small

and big institutions were not an exception when it came to doing this crucial stepped in

ordered to had a better understanding of the cycle of their expenses, revenues, and

income (Smith, 2022). This studied aims to provided a wider scope of having a better

understanding of the manual accounting process inside businesses in cases of getting

the held of the businesses’ income and how it fluctuates with their strategies upon

selling the businesses’ services or products. It was possible to comprehend how

manual accounting was used by small business and how large corporations enable

manual accounting to played a significant role in their day-to-day operations. (Leigh,

2022)

It helps in evaluating business performance. You could compare your current

data with the prior accounting records and allocate your budget effectively by comparing

your current data with the previous accounting records in addition to helping you keep

track of expenses, gross margin, and potential debt.

Recognizing the effect of the usage of manual accounting by small and big

business were important in today’s society, the researchers aimed to determine the

effect of manual accounting on small and big businesses and how helpful it was in their

daily operations. Understanding the ways of doing an accounting of smaller institutions

from bigger institutions could helped rationalize the key factor of foreseeing the

relevance of used the manual accounting process. In addition, this studied had been a

guide for businesses that were not familiarized with the usage of accounting. Manual

accounting was created to assist businesses to operate their functions (Fernando,

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2023). According to Churchill and Lewis (1983) considering how businesses were

growing into much more relevance, how quickly businesses improved, and how it

became a key factor in economic growth, accounting was an analytical tool in the

industry.

While this studied was surrounded with the interest of comparing the ways how

small businesses and big businesses did manual accounting, it was beneficiary on the

businesses’ part for this would serve as an inclination of interests' businesses was to

partake in. This studied aims to helped with the development of manual accounting in

the field of business

CONTEXT

The Rational Choice theory by Adam Smith (1776) was best explained through

the used of example situations. It suggests that when given a certain number of

alternatives, people would naturally select a single option that had the highest utility (or

benefit) for them. For example, if an investor was able to chose between two

investment choices – with one carrying a lowered risk and the other a higher potential

returned – then they would chose the option that gave them the most utility, I. e., the

higher returned in this case. The theory of rational choice helps in understanding how

decision-makers arrived at their preferred investment option, taking into consideration

the risk-return characteristics.

The Rational Choice theory also serves as basis for decision making in

accounting contexts such as costed and revenue optimization, capital budgeting

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decisions, pricing of services/substances, and so on. In its simplest form, the theory

suggests one should always made decisions that maximize the expected returned and

minimize costed or risk. This could helped related professionals in understanding the

drivers that shape an organization’s financial and operational decisions.

The Rational Choice theory also provides a platform for discussing behavioral

biases. It suggests that while individuals may had specific preferences and decision-

making styles, they should still strive to made reasonable decisions that optimize the

costed and benefits for a given situation. This could also helped organizations fine-tune

their constraints and processes to better align with the rational behavior of the

employees and stakeholders.

In conclusion, the theory of rational choice offers insights into decision-making in

accounting contexts. By understanding how individuals optimize their returned in

different scenarios, organizations could devise effective financial decisions and better-

targeted biases to account for reality. This would lead to an increase in efficiency and

profitability.

The significance of the rational choice theory postulates that business owners

would chose the option that offers the greatest benefit (e. g. ,utilizing manual accounting

procedures could facilitate tracking activities). This theory could be applied to

accounting decisions by understanding how businesses weighed the different costed

and benefits associated with each accounting procedure. By understanding how

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businesses weighed these factors, organizations could devise more effective strategies

for making decisions in their business operations.

The theory of rational choice could also been applied to accounting decisions in

terms of biases. By recognizing the different cognitive biases that individuals may had

in certain situations, organizations could tailor their decisions to account for these

biases. This would lead to more effective financial decisions and better-targeted biases.

Overall, the theory of rational choice could provided valuable insights into decision-

making in accounting contexts.

By understanding how individuals optimize their returned in different scenarios,

businesses could devise more effective financial decisions and better-targeted biases.

This would lead to an increase in efficiency and profitability; small or big business

institutions.

This studied focused on the most significant parts of the theories that had been

utilized. The purpose of this was to relate the theoretical framework to the substantial

variables of the studied, and the researchers developed an operational framework

(figure 2) to determine the effects of manual accounting in small and big businesses.

This part shows a formation that signifies an input-process-output model that

includes the broad structure of the studied and the substantial variables to figure out

how effectually it would be worked as its components.

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 This researched would focus on determining the effects of used manual

accounting in small and big businesses and was only limited to small businesses such

as retail stores, sari-sari stores, and convenience stores; and big businesses including

dealer stores, restaurants, and firms and foresees the effect of manual accounting in

small and big businesses.

This studied would considered their knowledge and understanding of accounting

in terms of used it for business purposes. Each respondent had been given a surveyed

questionnaire and answering them, these questionnaires were provided by the

researchers. This studied had been limited to small businesses such as retail stores,

sari-sari stores, and convenience stores; and big businesses including dealer stores,

restaurants, and firms.

Researched questions

This studied had been attempted to gave answers to the following questions:

1. Why was it vital to held manual accounting procedures in a business?

2. Why was the manual accounting process relevant to the business?

2. 1. What was its significance in small businesses?

2. 2. What was its significance in big businesses?

3. Why did businesses used manual accounting to track operations?

Significance of the Studies

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 This researched would aimed to determine the effects of manual accounting in

small and big businesses. The outcome of this studied had been beneficial to the

following:

Entrepreneurs. This studied would made it easier for entrepreneurs to

managed their businesses and more convenient when it came to their inventories and

financial reports.

Students. This studied would assist students and it would helped them

understand their accounting problems. They could cope with their accounting subjects

easily and they could learned new things and skills by used

Researchers themselves. The researchers had learned and developed the

writing, critical thinking, data analysis, planning, and communication skills required to

created good researched.

Future researchers. The result of this researched had been helpful in future

discussions on accounting usage and improved their understanding of businesses'

accounting processes.

Accountants. This could helped to develop an improved understanding of

manual accounting techniques and how they could been applied in different scenarios;

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uncover new ways of presenting financial data for better decision-making, which could

result in better performance of businesses in the market.

Definition of Terms

Business Owners. an individual who had the vision and ambition to identified

potential opportunities in the marketplace, started their own business or business

venture.

Manual accounting. was an effective accounting system necessary for any company

or organization in ordered to gathered, maintained, and had access to financial data.

Small businesses. were stores owned solely by small management and include retail

stores, sari-sari stores, and convenience stores.

Big businesses. were stores owned by corporate management which include dealer

stores, restaurants, and firms.

Accounting procedure. was the way a business computes, analyzes, and

foresees data of the transactions of a certain entity of the operations.

Operation. was the process of transactions of a business to earn profit from exchange

of service or product.

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 CHAPTER 2

REVIEW LITERATURE AND STUDIES

Impacts of Manual Accounting process

Foreign Literature

Studied had found that the business process characteristics of complexity,

impact, and volume tended have been important factors when deciding to outsource

processes. The degree of complexity in a business process had been demonstrated as

a major indicator of whether or not it should been outsourced. Processes of a highly

complex nature often require specialized skills and processes that may been costlier

and more difficult to establish in-house (Karim, 2020). The impact of the process also

had an effect on whether an organization was likely to outsource it or chose to

internalize it (Karim and O'Leary, 2020). Risk-prone processes were more likely have

been outsourced than other processes which require a more ‘hands on’ approached

and direct controlled. Finally, the volume of the process played an important role since

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there was an economic incentive to outsource processes with many transactions. In

conclusion, the make-or-buy decision whether to outsource or internalize business

processes was often influenced by the complexity, impact and volume of the process.

Companies often chose to outsource processes if they require specialized and difficult

to acquire skills, if the process carries risk or was important in affecting customer

satisfaction, or if it involves a large volume of transactions. Therefore, these

characteristics should been considered when deciding whether to outsource or

internalize a business process

Allowing the dis-aggregation of processes that could been outsourced, cloud-

based information systems also improved operational efficiency and costed savings.

Cloud-based applications allowed companies to outsource larger chunks of their

business processes, since these applications eliminate the needed to purchase specific

hardware and software. Instead of spending large amounts of money to bought and

maintained equipment, the company could access the resources remotely, without

having to own them. Moreover, the company could scale its cloud-based processing

quickly when needed, reducing operational costed. The increasing trend towards cloud-

based services had made it easier for companies to outsource their business

processes. This shifted had providednumerous benefits to companies in terms of

costed savings, flexibility and access to specialty skills. In addition, the fact that cloud-

based services enable the disaggregation of business processes and improved

operational efficiency was making it easier for companies to chose specific parts of their

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business processes to outsource. This had led to increased availability of BPO

opportunities, which was likely to continued in the years ahead

Cloud-based Ais possesses a unique set of features such as secure and

automated access that enable companies to outsource their accounting processes more

efficiently. This could, for example, provided organizations with increased supervision

and controlled over the outsourced activity, which could helped reduce costed and

enhance the quality of their accounting operations (Moran and Bai). Moreover, cloud-

based ais could reduce or eliminate shipment costed and potential shipping delays,

provided better security compared to traditional systems, and enable faster turnaround

times as well as more direct access to the data. Another overlooked benefit that firms

could gained from used cloud-based ais was the potential ability to benefit from

economies of scale - which in turn could increase costed efficiency and profitability

(Eurocloud). Ultimately, cloud-based ais possess many qualities that made them

attractive to organizations considering outsourcing accounting services; however, the

organizations should been mindful of the risks associated with cloud-based ais,

particularly those related to data security and privacy (Martínez Hernández et al., 2018;

Oliveira et al., 2018). Organizations needed to considered all relevant factors before

actually investing in a cloud-based ais, and although this technology presents various

opportunities in the domain of accounting services outsourcing, appropriate governance

measures must been taken to guaranteed data security and the organization’s

compliance with its industry's regulations

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Nigeria's economic reforms had emphasized the importance of small and medium scale

enterprises (SMEs) to spur development within the country. These businesses, which

were typically managed independently (except for their owners), had flexible

administrative structures to maximize their productivity and profitability. Determining the

size and structure of these businesses involves a number of indicators, including

assessment of their capital investment, annual turnover, management structure and the

involvement of aliens, government entities or corporations, as per section 351(1) of

CAMA 1990. The national economic reconstruction fund defines SMEs as those with

fixed assets of up to ₦10 million, while the central bank of Nigeria (2015) limits capital

investment and turnover to ₦5 million and ₦25 million respectively. These businesses

were also seen as essential to helping Nigeria reached its goal of increasing its shared

of global industrial production to 25% by 2015 and 40% by 2020. Unfortunately, many

SMEs were failing due to inadequate management driven by the lack of reliable

financial and accounting information. To ensured their survival, SMEs in Nigeria must

made sure they were up to date with their financial records and had necessary capital

and resources. With a proper assessment and necessary planning, Nigeria's small and

medium scale businesses could created much-needed economic growth

Whether a firm was small or large, accounting was essential to its success. With

accurate business accounting, it was simpler to gauge sales growth and decline and

took prompt corrective action that would helped the company

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 According to Zoe talent (2021), manual accounting was used to recorded all

systematic business activities in books of accounting, which were then utilized to made

strategic business decisions about the direction the company should took to minimize

loss and maximize profit. In general, accounting was based on generally recognized

concepts and methods for presenting data about company transactions. Accounting

was used to addressed these limitations because humans were not sufficiently able to

rememberedall of the transactions

According to Edwards j. L (2020), proper accounting of business transactions

helps ineffective management. It also helps the management to evaluate the business

performance in terms of sales andtooktimely actions to overcome those shortcomings

which were affecting the business badly.

According to Rachel b. G (2020), the most important advantage of accounting was that

it organizes very complex data simply and presents it in easy-to-understand way.

Accounting processes a very large volume of data and presents it in simple reports to

the higher management so that it could been easily queried for valuable information

which could been used for better decision making. In accounting, data was organized in

such a way that if you’re looking for certain information, you could usually found it easily

Local Literature

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 Institutions said have been the ‘rules of the game’ serve as the basis for

legitimacy and changed. They were created through human interactions and set a

foundation of expectations, obligations, rights, and laws both in a private company and

a government institution. Institutions played an essential role in the achievement of

corporate sustainability by creating ordered between companies, society, environment,

and economy by prescribing certain process systems regulated with outcome. Such

institutional structures highlight the basis of a firm’s ability to reap legitimate benefits by

reinforcing its business objectives and interests while allowing the support of

environmental stewardship activities (sparks & gibbons, 2004).

Legitimacy and institution theories were both conceptually distinct but connected

in many ways. Institutional theory serves as the basis for legitimacy theory in terms of

providing an outlook of expectations, obligations, rights, and laws which influence

corporate decision makers. These could exist in the form of government regulations,

laws or internal policies which considered various stakeholders. On the other handed,

legitimacy theory serves as an elevator to what was accepted as necessary for stability

within organizations with a managerial emphasis on responding to external expectations

and demands. Both theories were essential for understanding an organization’s ability

to remain in compliance with respect to social and environmental responsibility. In

conclusion, legitimacy and institution theories were two essential frameworks providing

an understanding of an organization’s ability to maintained a healthy relationship with

external stakeholders. The legitimacy principle was connected to the principles of

institutional theory in terms of providing expectations, obligations, rights, and laws for

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companies to followed. Both theories support an organization’s ability to remain in

compliance with respect to social and environmental responsibility

The Managerial Implications of this theory suggested that both the financial and

environmental performance should beentaken into account while making a decision.

With such responsibility assumed, the management had to acted on both the financial

and environmental aspects of their business in ordered to achieve sustainable growth

and success. In conclusion, the stakeholder theory suggests that the management’s

responsibility was to acted for the interests of all stakeholders instead of just its

shareholders. It was assumed that economic effectiveness had a tradeoff with

environmental accountability, however, firms should took into account both the financial

and environmental performance when making a decision. This theory, then, provides

managers with the guidance to considered both its financial and environmental

performance before settling on a decision in ordered to achieve sustainable growth and

success.

a Sole Proprietorship, you would needed to register with the Department

of Trade and Industry, the DTI, the BIR and the various LGUs also.

When making this decision, remembered that your small business might not

always been a small business! so, before moving forward to register your business,

prepare a business planned and identified what your planned and objectives were for

the business in one year, three years, five years or maybe longer down the line. This

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would helped you to understand which typed of registration would been most

appropriate for your business

For example, if you intend to took on investors shortly after you started the

business, registering the business as a standard domestic corporation was likely have

been the most suitable set-up as this typed of entity allows for multiple investors and

shareholders.

Understanding your Tax and Compliance requirements on small businesses

may not always been fully aware of their tax obligations from the outset. If the business

was just starting out, they may not had access to, or the financial resources for, an

expert accounting or tax adviser. However, from an accounting perspective, it was

crucial that small businesses considered their tax and compliance obligations in the

same way that a large corporate or multinational would and ensured 100% compliance

with SEC and BIR requirements.

If a small business was selling services, let’s used digital marketing services as

an example, the business should been issuing official receipts for every payment

received for the services provided

These documents were the underlying evidence that supports the entry of

transactions into the accounts and books of the company. They were also relevant

when computing taxes on both the revenue and expense side of the business.

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 Small businesses should moved away from any view that they were only small

businesses and as such, don’t had have been overly concerned with accounting or tax

compliance. Whether it was the BIR, a potential investor or an existing shareholder,

there always exists the possibility that a third party would asked to review your finances

and tax compliance activities so made sure this was being monitored and managed.

According to J. B Maverick, no matter how big or small your business was, you

needed to understand if it was performing and had enough cash to survive. If you were

in charge of running a small business, you needed to knew if you were able to pay your

staff each week, if you could pay for electricity to keep the lights on, if you could pay

your suppliers to ensured that you actually had goods or services to sold.

Business collapsed was imminent without sufficient funding, or the financial

resources needed to maintained and ran a company. Despite the fact that analyzing a

company's profitability, both current and future, was crucial in evaluating the

organization, no business could operate for an extended period of time without turning a

profit. According to clouds PH (2021), many small businesses would just looked at their

finances on the basis of what cash was coming in and what cash was gone out on a

daily or weekly basis. This could result in issues as it would not took into account many

other key financial elements of the business.

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 As advised small firms toproduced/request a comprehensive range of financial

reports, including a cash flowed statement, income statement, profit and loss statement,

and balance sheet, and to examine them. Small businesses could adapt larger

companies' procedures, which could provided them with a significant advantage in

terms of financial analysis

Foreign Study

In the selection of process characteristics, the researchers relied on the existing

literature on accounting outsourcing, but also on a theoretical perspective from

transaction costed economics (TCE) (Williamson, 1985). TCE provides insight into the

factors that affect the costed and benefits associated with the choice to outsource. In

TCE, three specific process characteristics were discussed: frequency, human asset

specificity, and uncertainty. As all three of these criteria could lead to significant costed

if not optimally chosen in the outsourcing decision, these criteria was thought have been

relevant for our studied of accounting outsourcing as well. Specifically, frequency

describes how often a certain process needed have been carried out, and it was

expected to had an important influence on the choice of accounting outsourcing.

Processes that occur often were more costly to outsource than processes that

only occur rarely. Human asset specificity implies that some processes require people

with unique skills and/or knowledge to carried them out. Hence, if it was found that

processes with a high asset specificity (common in accounting) were more likely have

been outsourced, it was because these processes lack available expert resources in-

house. Finally, uncertainty measures the unpredictability of a process or outcome, and

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it was thought to played a role in whether the decision-makers opt for outsourcing or

not. All three of these criteria providedan indication as to when it may been more

advantageous for companies to rely on external services instead of managing the

process themselves. In addition to TCE, we also considered the global service

disaggregation framework (Apte and mason) in our selection of process characteristics.

This framework focuses specifically on the disaggregation of information-intensive

services, thereby providingadditional insights into the role of accounting outsourcing. In

particular, this framework offers two relevant criteria for our studied: information

intensity and the needed for customer contact. Information intensity describes how

much data was used in a process, while customer contact measures how often

interaction with customers was required. Both criteria were thought to had an effect on

the cost-benefit of outsourcing the accounting process, and thus could been useful in

determining when it was advantageous to outsource the process. The five criteria

discussed above thus provided us with an understanding of the complexities of the

outsourcing decision in the accounting context. By focusing on these criteria, we could

better determine when a process was more or less suitable for external services. This

was particularly important when considering cloud-based ais, since these systems

offered greater scalability, accessibility, and performance than systems in-house. The

results of our studied suggested that cloud users were more likely to outsource

accounting processes deemed suitable by these criteria, thus providing further evidence

for the potential that cloud-based ais had to reduce costed and complexity associated

with the accounting outsourcing decision

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 Financial accounting was concerned with recording of transactions, preparation

of financial statements and computations of taxes as required by the government. It

also includes categorizing business transactions and preparing reports based on them.

Financial statements were usually presented as balance sheets, profit & loss accounts,

cash flowed statements and notes to accounts. (Ehrhardt and Obeng) Cost Accounting

was concerned with the analysis of costed associated with a particular activity or

several activities. It could also involve identifyingcosted controls and improving

processes in ordered to reduce costed and increase profits. Costed accounting was

most useful when including budgeting, forecasting and analyzing the overall costed

structures of a business. (Van Horne, 2009) Management accounting was mainly

concerned with budgeting and planning activities, decision making and their supporting

processes. It provides an analytical perspective on financial aspects with an emphasis

on accuracy and timeliness to createdvalued and assist management in decision-

making. It includes the usage of costing, costed allocation, variance analysis,

forecasting and strategies. (Hope, Andrew and Fraser) Tax accounting was concerned

with the computation of taxable income, paying taxes due and filing returned to various

authorities as required by law. It was especially important in corporate entities due to

heavy taxation of profits and high compliance costed associated with the same. (Lasich

et al, 2019) in conclusion, accounting was a core process for any business organization

and involves analyzing, measured and interpreting economic information so that

judgements and decisions could been made. It involves several concepts liked the

gone concern, consistency, accrual and business entity. Accounting was used in

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several ways such as financial accounting, costed accounting, management accounting

and tax accounting and each had their own roles and purpose

LOCAL STUDIES

According to Duchac (2019) an accounting system such as this was also helpful

in that it could provided fast and accurate information for the preparation of financial

statements. This means that one could prepare accurate, timely financial statements

faster than with manual bookkeeping. The computerized accounting system provides

companies with improved access to important financial information from many sources

that could been used for performance evaluation. This helps to ensured better decision

making and strengthens internal controls. In addition, it allows the company to keep up

with changing tax laws and accounting standards and helps avoided costly non-

compliance penalties. On the other handed, computerized accounting systems were

not without drawbacks. The primary concern with a computerized system was security

and access. If the proper protocols were not put in placed, then confidential information

may been at risk. In addition, the costed of implementing such a system could been

high, since specialized software needed have been purchased and/or personnel needed

have been trained. Finally, computer systems require ongoing maintenance and

technical support in ordered to ensured that they function properly. In conclusion, the

computerized accounting system had various advantages and disadvantages. The

primary advantage of this system was that it provides faster, more accurate financial

information for a company. However, security and costed issues must been considered

23
when implementing such a system. Despite these drawbacks, the advantages outweigh

the disadvantages which made this system a useful and beneficial tool for businesses

Whatever accounting system was chosen, its implementation and integration into

the existing organization's structure of the system should been done carefully.

Moreover, computerized accounting system was necessary for organizations‟ that could

benefit from its advantages such as accuracy, speed and internal controlled reporting

system. Lastly, there were some costed associated with installation and maintenance

of computerized accounting systems, thus it was important to evaluate if investing in

such systems was economically feasible. Overall, a computerized accounting system

was suitable for businesses that would benefit from its advantages such as accuracy

and speed. It could save time and resources thanked to reliable internal controlled

reporting. However, organizations should assess the economic feasibility of installing

such systems and considered their complexity of implementation and maintenance.

Accordingly, McBride (2018) explains that computerized accounting systems,

meanwhile, had their own advantages as well. The widespread availability of

accounting software packages that had been designed have been easy to used had

made the transition to computerized accounting much easier. This typed of system also

offers a wide range of features such as automated journal entries, graphs of income and

expenses, invoicing, and the ability to generate reports. It was more efficient than

manual accounting and could save time and money. Computerized systems also

provided more internal controls such as authorization, checks and balances, and user-

specific permission levels. Additionally, computerized systems had the ability to

connected to a wide range of data sources such as banks and provided real-time

24
access to financial information. Overall, we could draw the conclusion that while

computerized accounting systems offered more efficiency and controlled, manual

accounting might been better for smaller businesses or those only wanting to track

basic information. Ultimately, business owners should evaluate their specific needed

when deciding whether to used a manual or computerized accounting system.

Chapter 3

METHODOLOGY

Sample

This study would be utilizing the qualitative phenomenological research design

whose primary objective was to explicate the meaning, structure, and essence of a

25
phenomenon (Christensen et. al, 2010). We would be employing Psychological

Phenomenology, which was also referred to as Empirical or Transcendental. According

to Moustakas (1994), as cited by Creswell (2005), this approach focused less on the

interpretations of the researcher and more on the description of the experiences of the

participants.

The Researchers of this study would be having 3 participants who were owners

of Businesses in Bayambang; Small and/or Big, who conducted their accounting

process for their Business. Probability sampling would be used so that subjectivity

would not prevail in the process of choosing for the Owners of Businesses who would

be the respondents of this research. The researchers would be picking the respondents

through a criterion sampling strategy that involved identifying and selecting people who

experienced conducting manual accounting processes for their Business.

The study's primary goal was to gain a deeper understanding of how manual

accounting practices influenced financial performance, decision-making, and overall

success of small and large businesses. Every business needed accounting, which

involved gathering, examining, and interpreting financial data.

Researchers had three main objectives:

· Performance Evaluation: They wanted to comprehend how effective

accounting practices contributed to the financial stability, growth, and profitability of

both small and large companies.

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 · Identifying Differences: Researchers aimed to pinpoint the key variations

in manual accounting practices between small and large businesses. This was

essential because small businesses often had limited resources and distinct

reporting requirements compared to larger enterprises, which had consequences

that the study could resolve.

· Comparative Analysis: By comparing the effects of manual accounting

practices in small and large businesses, researchers sought to identify best

practices that could benefit both sectors and develop specific recommendations for

each.

This study aimed to emphasize the importance of manual accounting practices in

shaping the financial outcomes and decision-making processes of businesses, while

also acknowledging the potential differences and similarities between small and large

enterprises.

Research Questions

Data Sources

The researchers would be having 3 respondents to provide in-depth information

about lived experiences regarding the questions on the effects of Manual Accounting in

Small and Big Businesses in Bayambang. Also, the researchers would be citing and

27
reviewing related literature and studies online to have a general background on the

study that was being conducted.

Data Gathering Procedure

First, we would be selecting the participants with the help of identifying Business

Institutions. We would personally meet and ask the participants for affirmation through

building rapport and asking politely to conduct an interview on a schedule to be set by

the interviewer based on their available time. The actual one-on-one interviews would

be conducted in a confidential and safe space for the Business Owners to provide a

better way of conducting the study.

Intervention

The researchers would be treating and analyzing the data gathered from the

interviews using Moustakas’ (1994), as detailed by Creswell (2007). After the data

gathering, the researchers would be bracketing, a process of mitigating the potentially

deleterious effects of preconceptions that may taint the research process (Tufford and

Newman, 2010). Then horizontalization would be done, highlighting the significant

statements. Then theme clustering in which summarized the answers of the participants

and would be grouping them based on significant meanings. To write the short

description, the textural description would be used. To interpret the answers with

structural description and proceed with the writing of concrete and composite

descriptions to present the "essence" of the respondent's experience in using the

Accounting Process for their Business.

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 After careful analysis of the "essence" of the respondent’s experiences and tips,

the researchers would be following the ethics of research in verifying the respondent’s

answers to assure that the right interpretation of the researchers would satisfy and have

the accuracy to the answers given by the participant.

First, the researchers would be selecting the participants with the help of

identifying Business Institutions. The researchers would personally meet and ask the

participants for affirmation through building rapport and asking politely to conduct an

interview on a schedule to be set by the interviewer based on their available time. The

actual one-on-one interviews would be conducted in a confidential and safe space for

the Business Owners to provide a better way of conducting the study.

CHAPTER 4

FINDINGS AND INTERPRETATION OF DATA

The "Effects of Manual Accounting in Small and Large Businesses" study found

that, in comparison to their larger counterparts, smaller accounting systems usually

have greater financial record error rates. Carries a greater chance of human error,

particularly in small enterprises with possible limited resources.

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 Based to the studies, manual accounting can be feasible for smaller companies

with less complicated operations, but it gets more challenging for larger companies.

 Skills and Efficiency:

1. Have you faced challenges finding employees with the right manual

accounting skills?

 Yes

2. Do you think manual accounting is time-efficient for your business?

 Yes

 Usage of Manual Methods:

1. Do you use manual accounting methods like ledgers or spreadsheets?

 Yes, they used manual accounting methods like spreadsheets. It could

be a practical choice. Spreadsheet software like Excel or Google

Sheets allows for easy data entry, calculations, and basic financial

analysis.

 if I were running a large business with a high volume of transactions,

complex financial structures, and multiple departments, using a ledger

or specialized accounting software might be more appropriate.

 Advantages and Disadvantages:

1. What do you see as the pros and cons of manual accounting?

Pros of Manual Accounting

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  Manual accounting can be more cost-effective for small businesses with

simpler financial structures. It eliminates the need for expensive

accounting software or hiring specialized personnel.

 Manual systems are not reliant on technology, making them less

susceptible to technical issues or software failures.

 Engaging in manual accounting can deepen the business owner's

understanding of financial processes, fostering a more hands-on approach

to financial management

Cons of Manual Accounting:

 Manual accounting is labor-intensive and time-consuming. Tasks such as

data entry, reconciliation, and report generation take longer, reducing

overall efficiency.

 Manual systems often provide historical rather than real-time data. This

can hinder the ability to make timely and informed business decisions.

 Switching to Automation:

1. What factors would influence the decision to switch from manual to

automated accounting?

 As a business owner, the decision to switch from manual to automated

accounting would be influenced by various factors, taking into

consideration the needs and goals of the business. If the business is

experiencing growth in terms of transactions, customers, and

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 complexity, automated accounting systems become more attractive.

Automation can handle larger volumes of data more efficiently than

manual processes. The desire to minimize errors in financial records is

a compelling reason to switch to automated accounting.

 Confidence in Accuracy:

1. How sure are you about the accuracy of your manual accounting records?

 Despite my best efforts to assure accuracy, there is always some

degree of uncertainty when it comes to the the accuracy of manual

accounting records. When data entry, calculations, or account

reconciliation are involved in manual accounting operations, human

mistake might happen. Errors can happen even in the presence of

strict checks and balances.

 Adaptability to Growth:

1. How well does your manual accounting system handle the growth of your

business?

 using a manual accounting system, its ability to handle the growth of

the business would likely face challenges. Manual systems, while

suitable for smaller operations, can become cumbersome as the

business expands.

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 Manual vs. Digital:

1. Why do small and large businesses choose manual accounting over digital

methods?

 Small Businesses: Affordability is a key factor for many small

businesses. Manual accounting requires minimal investment in terms

of software and technology, making it a cost-effective option when

budgets are limited.

 Large Businesses: While large businesses may have the financial

resources for digital accounting tools, some may still choose manual

methods to cut costs, especially if their existing systems are perceived

as "good enough."

 Small Businesses: Simple financial structures and a low volume of

transactions in small businesses make manual methods manageable.

Some small business owners may prefer the simplicity of manual

processes.

 Large Businesses: In certain cases, particularly in industries with

straightforward financial transactions, large businesses may find that

manual methods suffice without the need for more complex digital

systems.

2. In what ways can manual accounting be effective for both small and large

businesses?

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  Manual accounting can be effective for both small and large businesses,

especially in certain situations and under specific conditions.

 Manual systems are not reliant on technology, making them less

susceptible to technical issues or software failures. This can be

advantageous in situations where technology infrastructure is limited or

unreliable.

 Some businesses, especially those with concerns about data privacy, may

prefer manual methods to keep financial records physically secure and

reduce the risk of unauthorized access.

CHAPTER 5

RECOMMENDATION AND CONCLUSION

The Survey on the Effects of Manual Accounting in Small and Large Business in

Bayambang, Pangasinan might offer benefits like cost-effectiveness and personalized

control for small businesses, the challenges of scale and resource intensiveness

become more apparent in larger enterprises. The general trend, based on surveys,

34
indicates a shift towards digital solutions for improved efficiency and compliance,

especially in larger business environments.

RECOMMENDATION

Small Businesses:

1. Regular Training and Skill Development: Invest in regular training sessions for

staff involved in manual accounting processes. Enhancing skills can lead to

improved efficiency and accuracy in managing financial records, mitigating the

risk of errors.

2. Supplement with Simple Software: Consider supplementing manual processes

with simple accounting software. This can help streamline certain tasks,

providing a middle ground between manual and fully automated systems without

a significant increase in costs.

Regular Financial Health Checkups: Conduct regular financial health checkups using

manual records. Periodic reviews can help small business owners stay proactive in

addressing financial challenges and making informed decisions.

Large Businesses:

Gradual Transition to Automation: Plan a gradual transition to automated accounting

systems. Large businesses can benefit from a phased approach, implementing digital

solutions incrementally to manage the complexity of the shift effectively.

Invest in Training and Change Management: Allocate resources for comprehensive

training and change management programs.Transitioning from manual to automated

35
systems requires a cultural shift. Investing in training ensures that staff is equipped to

adapt to new technologies.

Implement Robust Internal Controls: Strengthen internal controls to mitigate the risks

associated with manual processes. Large businesses, with their complex operations,

need stringent controls to ensure accuracy, compliance, and fraud prevention.

In conclusion, the key is to balance the advantages of manual accounting with

the need for efficiency, accuracy, and scalability. Small businesses may find manual

systems sufficient initially, but a transition to automated solutions becomes more critical

as they expand. Large businesses, facing resource challenges and increased risks,

benefit from carefully planned transitions to more scalable and efficient digital

accounting solutions. Regular assessments and adaptations based on the business's

growth and changing needs are crucial for long-term success.

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Journals
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