January 26, 2022


Accounting + Finance Blog

Manual Process Model Meaning and Importance

Manual Process Model Meaning and Importance

The manual process model is the traditional way of keeping financial data. Although it is out of place in modern times, knowing manual processes in accounting helps with understanding computer-based systems. In this article, let’s explain it and state its importance.

Definition of Manual Process Model

The manual process model is an Accounting Information System that makes use of traditional methods of keeping financial information. These traditional methods are ledger books and other booklets. In reality, this method is totally small and cannot support high volumes of financial transactions that took place daily. Also, it leads to a lot of errors. But there are advantages.

Importance of Manual Process Model

The manual process model of record-keeping and accounting is what is taught in schools. There will never be a time when the manual system of teaching will go away. Although, there might be some modifications for just one reason. Education is going online! Learning transaction processing manually will help students understand the basics and advance bookkeeping and accounting courses.

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The application of double-entry principles, preparing and presenting financial statements are best learned from the manual process or a modified manual processing model as done by sbaccounting.com.ng and many blogs. It is only when you can relate with manual bookkeeping that a computer has an accounting package that will make more sense.

Another significance of the manual processing model is it helps understand business processes. To initiate sales, for example, several business procedures are followed. These include and are not limited to catalog, invoicing warehousing, and delivery. In addition, these procedures are independent of the accounting software. Therefore, learn accounting traditionally helps learn these basic processes.

This model if understood can help in the internal controls. Informal education, internal controls are taught first in class, before a practical application is done using computer software. The internal procedures are segregation of functions, supervision, independent verification, audit trails, and access controls. When understood properly, it can be applied in a computer-based accounting system.

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Finally, this manual process model is quite old. It complies with traditional accounting principles taught in the classroom. The benefit has no end. Imagine, in an organization, no one knows bookkeeping and accounting using this system. And the automated system breakdown due to one reason or the other. How will the books be closed for the day? You see, understanding manual procedures might be the hero of the day.