Skip to main content

The paper-based management systems are slowly yet inevitably going to die a silent death. This is the era of intellectualization. The traditional books of accounts, ledgers, and transactions are slowly but surely going to vanish. People have started preferring computers instead of papers as it offers them more than just the ease to store information in compact form and make them accessible from any remote point on earth via an internet connection.

Avoid 10+ Disadvantages of Paper Management Accounting System

With so many technological tools and methods available that can save significant time and effort, why would a company still use paper-based management systems in accounting processes? Financial accounts are an important part of your business, but what happens if you lose them? What is the solution to keep these records and not lose them? This is a problem for every business; whether it is a small or big one.

Paper Management System in Accounting refers to an old method of recording and managing business financial accounts. Before this management system was replaced with accounting software programs, a lot of businesses were using it. Even though the method is not used by many businesses today, it is still being used by some small-scale businesses. In this article, we will discuss the disadvantages of the paper management system in accounting.

Space Issue

The first and major problem with paper management is that it requires a lot of space to store the documents. The documents are most of the times lost or misplaced by the person who you assign the task to do so.

No Real-Time Data

You cannot access the information you want instantly if you are using a paper management system for your accounting. You have to go through every document and then only you can get the information you want. It is very time consuming and at times irritating too.

Lost Or Misplaced Files

The biggest problem with a paper management system in accounting is that there is always the risk of losing or misplacing some important document which can cause trouble for you later on in terms of legal issues and audit problems too.

Formatting Issues

If a company has huge documents, then it becomes quite difficult to manage them in one place as they require different formats to be placed in an organized manner.

High Cost

A paper management system requires many resources such as papers, printers and ink cartridges; these carry high costs.

Data Integrity:

Paper management often leads to the entry of incorrect data. This occurs because of the manual nature of the paper management system. The standards for entering data are not uniform and are not maintained as in a computerized accounting system.

Time Consuming

A paper management system is time-consuming because all processes are carried out manually. Paper-based accounting systems have a large number of processes, including purchase orders, customer invoices and payments; they take much more time to process manually than with a computerized accounting system.


A paper-based accounting system is unreliable because there is no backup for it in case of power failure or any other event that could damage it. It can also be lost or destroyed by fire, flood or another natural calamity.

Difficult to Track Down Information

In a paper management system, data is usually stored in folders, which makes it difficult to track down information when needed. This takes up more time for employees and customers alike, who may need to find an invoice number or some other information about a customer order.

Time Consuming

Even though many modern calculators have functions like print preview and spell check, human errors still make their way into spreadsheets and accounting reports. Since most employees don't double-check their numbers, these errors get passed on to the next individual.

Small mistakes like typos and miscalculations may seem inconsequential at first glance but they can lead to bigger problems down the line when they go uncorrected. The most common error is omission where an employee forgets a number or leaves out a column while transferring data from one document to another.


Paperwork can take up valuable hours of your employees' time as they manually sift through files, sort forms and move information from one location to another. Processing even a small stack of papers can be labor intensive when you consider all the steps involved. Many companies choose to outsource their paperwork in order to save resources that could be better spent elsewhere in their businesses.


Even if you are still using a paper-based management system, it's time to consider moving on and replacing it with an electronic one. The electronic accounting system can provide many benefits for your business. In this article, we have outlined the major disadvantages of paper management in accounting. If you are still not convinced and want to learn more about software accounting services, feel free to contact our team of professionals. We will help you find the best solution for your business that will meet your requirements and budget.

Leave a Reply