Advantages of using a manual system
On the other hand, there are some shortcomings of a business using the manual system of accounting and they are: It is prone to human errors like transpositions (when figures are written incorrectly) or illegible writing, which could easily lead to information being easily misunderstood. This kind of problem could occur due to the way the person who recorded the information writes certain letters. Say the letter f could be mistaken for a p. Information could be easily lost or damaged. This is because it is on paper. The paper could have fallen out of the book, in the case of the cleaner he could easily misplace his pocket book, if there was a fire or flood, the book where all the recordings were made could be easily destroyed.
Processing time. This has to do with the time used up in entering the information. Take a corner shop for example. At the end of the day all the transactions are recorded from the till so the owner knows the performance that day. The process of checking the till receipt and recording it in his book of accounts takes up a lot of time compared to Tesco using an EPOS system. After a while, in a business, these books used for recording pile up resulting in storage problem where the business owner has to buy cabinets or even create space like a room to safely store all these documents for when it is needed. Also there is the case where previous data is needed from say 2 yrs ago. The person who needs it would have to go through each cabinet in the file room until he/she finds it, which would not be easy considering the fact that there are loads of documents to go through.
It cannot be used by more than one person at a time. Compared to the computerised system where data is accessed on different computers simultaneously. With the manual system, people who need a particular document would have to wait till one person is finished with it before they can use it for whatever purpose it is needed for. The computerised system of accounting: this means doing the accounts with computer software like SAGE, OMNI accounts, QUICKEN. Advantages of using a computerised system
It allows for the simultaneous accessing of centralised databases. This means that staff at 100 different branches of a company like Tesco could access the price of a loaf of bread at the same time using the EPOS system. With a computerised system, errors are detected almost immediately. Take the QUICKEN software for example. When wrong information is entered, the user is notified immediately for corrections to be made compared to the manual system where if the wrong figure is entered, the mistake is detected if the person goes through the information a second time or someone else using the data detects it.
It is more efficient in terms of lesser time spent recording data no matter the size, lesser errors occurring when you make use of a computer software package instead of paper to record transactions and referencing to previous data. For example at Tesco the EPOS system displays the price of the goods being bought and calculates the total bill for the customer at the till. At the same time it records what goods have been bought, type of payment and the level of each stock on the store floor computer from where the information is easily transferred to the central store computer. All this information recorded manually will need different people to attend to each area and will probably take days to finish but with the EPOS system, it is done at that moment.
Networking in a computerised system enables users to transfer data easily. This is fully seen when the head office of Tesco probably situated at London needs to know the performance of each branch at the end of each day. All they need do is access the central server computer and get the figures because it has already been recorded by the EPOS system. Same as when they need to change their prices. They may transfer it to the central server computer from where it could be made available on the store floor computers for operations to continue as usual.
With a computerised system, backups could be used in case of the system crashing, data being wiped out .etc. For example there was a virus in the system at Croydon College and obviously students lose their course works on the hard drive they will only be able to submit their work because they had it saved on a disk or a USB. It is more secure than a manual system as not just anyone could access information within an organisation with a computerised system. Passwords and anti-virus software are examples of such securities that could be used in security the system within an organisation.
Despite all these good things about using a computerised system, an organisation will face the following problems using it. New and better software packages are being introduced every now and then and when such situations arise, the company will need to update their software. They will need money and a lot of it to successfully carry out this change especially if it involves a company like Tesco that is international with hundreds of branches. This is a problem because they will have to keep spending the large sums every time they need to make these changes.