According to Cabrera (2015) processing pertains to the operations required to

transform data into information required by users. The transformation of inputs into
outputs is accomplished by a processing components with three subsystems namely
storage, arithmetic logic unit and control subsystem. Cabrera also mentioned in her text
book that processing will involve the following activities which are storing of data,
calculating ,comparing, transcribing, summarizing, screening out of extraneous data and
storage. She also include that the methods of data processing are manual, electro-
mechanical and electronic. So with that let us discuss about manual accounting and
computerized accounting.

According to K.A Francis on "The advantage of manual versus computerized

accounting" he defined manual accounting as an act accountant or bookkeeper to post
business transactions to the general journal, general ledger and worksheet by hand.
This process can be completed by either using actual paper journal and ledger sheets
or by creating these sheets in a computer program such as Excel. It is considered
manual because each transaction is entered into the system individually. He compared
manual accounting and computerized accounting as follows. First, computerized
accounting programs are quicker as far as entering information is concerned. However,
even with the built-in error detection of computer programs, sometimes it is easier to
cross-check journals ledgers in a manual system since you can flip to the pages you
need, and even spread the books out on a table if needed. Second, computerized
accounting packages will automatically pull all relevant ledger entries for the period
reports. Manual accounting takes longer, but can help a bookkeeper better understand
the posting and end-of-period process. This is one reason why accounting students
cannot take a computerized accounting course until beginning and intermediate
accounting classes are completed. Lastly, a computerized accounting system,
information for a particular period of time can be compiled quickly. With a manual
system, it can take time to locate the information from each book and compile it into a
report. According to Kevin Johnston on "Advantages and disadvantages of manual
accounting systems" he said that the advantages and disadvantages of manual
accounting are. First on the learning curve, learning to do business accounting for the
first time, manual accounting can teach you the ins and outs of balancing debits and
credits and keeping up with things such as depreciation costs and overhead expenses.
This hands-on experience helps you to understand accounting transactions if you
computerize your accounting later. Second is on time, one of the disadvantages of
manual accounting is the amount of time you must put into it. Because you don't have a
computer categorizing and totaling figures, you must do this yourself. It takes more
hours to do manual accounting than it does computerized accounting. Lastly is on cost,
one of the strongest advantages of manual accounting is cost savings. Accounting
software can be expensive. If you are just starting a business, you can save money by
doing the accounting in a paper ledger. If you do the work yourself, you even save the
expense of having a bookkeeper.

According to Cabrera (2015) an electronic data processing is done with the use
of an electronic device or a computer. A computer is an electronic device which perform
sequences of internally stored instructions to accept data, apply the prescribed
 processes to it and supply the result of these processes. She said that the advantages
of electronic data processing are, it is extremely fast, extremely accurate, greater
processing control, large data volume handled with small external storage requirements
and reduced cost. The disadvantages are, relatively high cost of equipment, high cost of
system design and programming, channeling of work and conversion to an electronic
system. She said that the components of the computerized system are hardware,
software, people, procedures and data. According to Gary Hadler on "The advantages
of using computerised accounting software" the advantages of a computerized
accounting are as follows; First is speed, data entry onto the computer with its formatted
screens and built-in databases of customers and supplier details and stock records can
be carried out far more quickly than any manual processing. Second is automatic
document production, fast and accurate invoices, credit notes, purchase orders, printing
statements and payroll documents are all done automatically. Third is accuracy, there is
less room for errors as only one accounting entry is needed for each transaction rather
than two (or three) for a manual system. Fourth is up to date information, the accounting
records are automatically updated and so account balances (e.g. customer accounts)
will always be up-to-date. Fifth is availability of information, the data is instantly
available and can be made available to different users in different locations at the same
time. Sixth is efficiency, better use is made of resources and time; cash flow should
improve through better debt collection and inventory control. Seventh is staff motivation,
the system will require staff to be trained to use new skills, which can make them feel
more motivated. Further to this with many ‘off-the-shelf’ packages like MYOB the
training can be outsourced and thus making a particular staff member less critical of
business operations. Lastly is cost reduction, computerized accounting programs
reduce staff time doing accounts and reduce audit expenses as records are neat, up-to-
date and accurate.

According to Revelino Rabaja (2015) on "The persistence of manual bookkeeping" he

said that in practice, actual manual recording in the books is no longer done since
accounting records are usually maintained and generated in some sort of electronic
format, like Excel. Printouts of the accounting records are simply pasted onto the
registered manual books of account and are then used to prepare the company’s financial
statements. These same books are also presented to external auditors which the latter
use for their audit. The issue is that it remains unclear whether this practice is considered
substantially in compliance with the bookkeeping requirements of the Bureau of Internal
Revenue (BIR) under Revenue Regulations (RR) V-I or RR V-1. As one of the oldest
known revenue regulations still generally applicable today, the “Bookkeeping Regulations”
embodied in RR V-1 were issued in 1947 when the Philippines was still recovering from
the devastation of World War II. They govern the keeping of books of account, records,
registers, as well as, issuance of invoices, receipts, tickets and other supporting papers
and documents by persons subject to internal revenue taxes. In 1982, in response to the
clamor of multinational companies doing business in the Philippines to allow them to
adopt the global accounting system of their foreign parent companies, the BIR issued
Revenue Memorandum Circular (RMC) No. 13-82 which authorized the use of loose leaf
books of accounts, records, invoices and receipts for recording business transactions.
Soon after though, accountants and computer programmers recognized a downside to
storing data: around 2000, when “millennium bug” concerns were at their peak, the need
for tedious reconciliation put businesses to the test. Perhaps the challenge posed by the
electronic storage of data left taxpayers thinking that manual recording remained a viable
and safe option for keeping accounting records, though they kept looking for a more
efficient way to do it. In August 2006, the Department of Finance (DoF) issued Revenue
Regulations (RR) No. 16-2006, which laid down guidelines for the submission of books of
account and other records in electronic format, specifying among issued: the manner and
format in which such computerized accounting books/records shall be created, retained,
filed and issued; when and how such computerized accounting books/records have to be
signed or authenticated; the appropriate control processes and procedures to ensure
integrity, security and confidentiality of computerized accounting books/records;
other attributes required of computerized accounting books/records; and the full or limited
use of the documents and papers for compliance with the requirements of the BIR. The
BIR ordered the mandatory implementation of the Electronic BIR Forms or eBIRForms by
issuing RR No. 6-2014. The eBIRForms system was developed to provide taxpayers,
particularly the Non-Electronic Filing and Payment System (Non-eFPS) filers, with
accessible and convenient service through easy preparation and filing of tax returns. The
use of eBIRForms improves the BIR’s tax return data capture and storage, thereby
enhancing efficiency and accuracy in the filing of tax returns. The efforts of the BIR to
embrace technology and continuously look into efficient measures for easy preparation
and filing of tax returns have been commendable. It would be timely for the BIR to issue a
clarificatory circular allowing taxpayers to use computer-generated printouts as an
acceptable method of recording entries in the manual books of account. Such a circular
could also apply retroactively to cover Excel-formatted accounting records submitted to
the BIR during tax audits of the past taxable years.