Manual methods of data processing

By The End Of The SuBtopic, Learners Should Be Able To;
Explain manual data processing. Compare manual and mechanical methods of data processing. Explain the advantage and disadvantages of manual data processing.

Accounting data can also be manually processed. In some instances manual and electronic methods are combined at different stages when processing business information.

A manual data system requires that a data capture clerk enters transactions from job cards, source documents and other sources on to subsidiary books (Cash book and journals) and post to the ledgers by hand.
A bookkeeper proceeds to record the information into the books of accounts.
Then an accountant goes on to prepare final accounts and management reports from the ledgers.
This process is accomplished by either using paper journals or ledger sheets or by using spreadsheets such as Excel.
The procedure is considered manual because the entire process involves lots of human presence and intelligence.

Mechanical data processing

A mechanical data processing or computerised accounting system permits the user to enter transactions into some computer program and everything else is virtually processed.
A computerised system captures transactions electronically or through manual methods and the processing of subsidiary books, ledgers and final accounts is executed by some accounting software.
There is some limited involvement of human effort in a computerised accounting system. Hence, it is the best of both worlds.

Manual data processing	Mechanical data processing
Limited use of computer hardware.	High use of computer hardware.
Limited use of accounting software.	Uses accounting software.
High use of human labour.	High use of computing technology.
High labour costs.	Low labour costs.
Low capital investment.	High capital investment.
Slow data processing.	Fast data processing.
Very little computer skills required.	High technical/computer skills required.
Lots of paper work.	Very little paper work.

PROS	CONS
Not very expensive to administer.	Too much paperwork involved.
Creates more jobs.	Difficult to locate and correct errors.
No virus or data loss threats.	Many departments may be needed /involved.
Errors can be traced to specific individuals.	Slow to get information or reports.
Job involvement and satisfaction.	Affected by strikes or employee activism.
Processes can be stopped and reversed when necessary.	Personality clashes may affect production.
Paper work provides immediate backup.	Fires can destroy all information if there is no off- site storage.

Mechanical data processing systems may be good if the benefits justify the costs.
Computerisation can be applied either in small or big enterprises alike.
The business may choose to automate part or all of its business operations.
Careful planning is needed when migrating from a manual system to a computerised accounting system.