Advantages & Disadvantages to Manual Data Entry

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Being hands-on with your business is a good thing, but that doesn't always apply to every phase of operations. Data entry is one key aspect of business where the move to automatic processes is almost always better. In very small businesses where the owner is the main operator, it can still make sense to do all the data entry manually, although upgrading to an automatic system can make for smoother operations. For companies with more than one or two employees, it can also make financial sense to move away from manual data entry as soon as possible.

Disadvantage: Human Error

Try as we might, human beings are more prone to error than computers. While a computer system has the occasional glitch, it generally records data and organizes it in a more accurate way than human beings, with less need for error checking. Manual data processing requires far more eyes to check and double check data for accuracy.

Disadvantage: Speed

It takes a lot of time to enter data manually. Machines and computers are generally faster than humans, which frees up time for employees to focus on other things. Instead of typing in numbers all day long, your employees could spend more time reviewing inventory, creating charts or drawing up projections for future growth.

Disadvantage: Labor Costs

It costs a lot of money to pay people to manually enter data, and it keeps entrepreneurs and other employees from investing more time on their point of greatest contribution toward the vision and mission of the company. The job of many can now be completed by one person, which means that you need fewer data entry employees, or than you can use your employees in areas that better engage their gifts in order to speed up company growth.

Advantage: System Costs

Manual data entry does not require expensive systems, machines and programs. Small business owners do not always have a large start-up fund when getting operations running and off the ground. A manual processing system allows a business to get into the game without having to invest a lot of precious capital into computers, machines and computer processing methods.

Advantage: Ease for Small Start-Ups

Some entrepreneurs have a good sense of how to track data on paper using ledger sheets, but are not as comfortable with computer systems. During a time when you are likely learning a lot of things at once in order to get your business going, it might be preferable to temporarily put off learning a data entry system. As long as you keep accurate records manually, you can wait to explore that option until the rest of your daily operations are more routine.

Advantage: Increased Oversight

When you keep records by hand, you have control over which categories each individual number is placed in. If your business has unique needs that make sales or trends hard to track in an automated way, you might need to track these numbers by hand. For instance, social service agencies that record changes in family dynamics or relief from emotional distress might find manual data processing methods to be more accurate than automated methods.

Transitioning from Manual to Modern Data Entry

While manual data entry is sometimes easiest with a very small business and allows for smaller costs in getting the ball rolling, as a business grows, so must its methods. When you are ready to transition from manual data entry to something a little more sophisticated, you might look into programs like Quicken, QuickBooks, or the free program, ZipBooks. Any spreadsheet program can help you categorize other measures, such as program success rates, employee trends, or changes in dynamics and projections in easy to understand ways. It is wise to enter in a few months or years of past data so that you can see trends in the new numbers as you enter them in. When in doubt, consult an accountant or data entry specialist for one-time help or as a regular support in maintaining accurate data records for your business.

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About the Author

Victoria Bailey has owned and operated businesses for 25 years, including an award-winning gourmet restaurant and a rare bookstore. She spent time as a corporate training manager in the third-largest restaurant chain in its niche, but her first love will always be small and independent businesses. Bailey has written for USAToday, Coldwell Banker, and various restaurant magazines, and is the ghostwriter for a nationally-known food safety training guru.