What Are the Benefits of Manual Accounting?
Before the advent of the computer age, virtually all business owners used manual bookkeeping systems. Manual bookkeeping systems can be cumbersome and unmanageable for large companies that need to track thousands of records, but some independent operators actually find it simplest to enter business records into a ledger by hand and tally the results with a calculator.
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Simplicity
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In order to maintain a manual bookkeeping system, you need to purchase only an accounting pad that costs a couple of dollars, rather than a computer and applicable software, which can cost hundreds or even thousands of dollars. You only need to lift your pen and begin writing, rather than learning an accounting program that will require expensive updates. You can easily do the data entry yourself, simply by arranging your receipts in order and then writing them sequentially in your ledger.
Single Entry Bookkeeping
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Most computer bookkeeping systems use double entry bookkeeping, which links each expense to bank account and credit card accounts. But many legitimate small businesses have discrepancies between their bank accounts and their bookkeeping records because they make some purchases with cash, or because they experience delays in paying or being paid. A straightforward manual bookkeeping system simply lists and categorizes expenses, and lists and categorizes sources of income, eliminating the need for accounting processes that are irrelevant or more complicated than necessary.
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Unnecessary Technology
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Manual accounting systems do not require any knowledge of computer systems, such as the ability to program and maintain spreadsheets. Although computer spreadsheets can be versatile by linking fields and they save time by completing calculations, some business owners find computer spreadsheets complicated and intimidating. An independent operator who is not computer literate can nonetheless maintain a perfectly legitimate set of books simply by keeping them up to date and making sure they contain all relevant entries.
Transparency
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A complete and well organized set of manual books provides a degree of transparency that can be difficult to achieve with a computerized system. If you own a very small company, such as a one person operation, and you are audited, a tidy set of manual bookkeeping records will convey to an auditor that your financial picture is straightforward and clear. Unlike computer records, which are easy to change and delete, a manual bookkeeping system shows every change you make.
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