Manual data entry of hundreds of numbers every day can make accountants and administrators more susceptible to errors. Data entry of invoices, bank details, account codes can be stressful, it’s very easy for numbers to become distorted especially when being inputted repeatedly. When mistakes are made in accounting the result can be inconsequential or cause a domino effect impacting the result of numbers and books.

Error of Original Entry

An error of original entry happens when the amount of a transaction is recorded incorrectly, this error is not confined to a single account or book, all the relevant accounts would show the same error of original entry appear so the books would be balanced but with the wrong amount.

Error of Duplication

An error of duplication occurs when the same record is mistakenly entered twice. This could be two debits or two credits that should in fact be one. An error of duplication isn’t necessarily limited to two repetitions of a single record, it could be any number of repeated entries that should only be documented once.

Error of Omission

An error of omission is simply an overlooked entry or a failure to record a transaction. This can happen easily if paper records of a purchase like receipts or invoices are misplaced. Errors of omissions can be partial or complete. A partial error of omission occurs when an entry is posted in only one space and not the other. A complete error of omission is when an entire transaction is missing from all the books. Digital records of spending money or receiving goods helps to avoid this error because there is more organization and minimal risk of losing or misplacing documents.

Error of Entry Reversal

When a transaction is entered going in the wrong direction, it’s known as an error of entry reversal. Essentially, this error comes down to a credit being recorded as a debit or vice versa. When this occurs fixing the problem can be quite easy once caught, but if it goes unnoticed it can lead to frustrating unbalanced books. It’s helpful to separate accounts receivable and accounts payable personnel to keep any transactions clearly divided.

Error of Principle

Simply put, an error of principle occurs when an entry is recorded in the incorrect account. This error happens when a journal entry violates general accounting guidelines or specified company rules. This error can occur even if the entry is recording funds in the right direction and if the amount is accurate.

Error of Commission

An error of commission is when journal entries are posted to the wrong subsidiary account or customer ledger. Even if the amount is debited or credited correctly, this error lead to problems when reconciled with the A/R ledger or General Ledger.

Compensating Error

A compensating error is when an entry is recorded in error to get another error to balance out. For example, if an error is recorded as a debit, a compensating error would be a credit entry posted intentionally to offset the initial error. To avoid these kinds of errors, they should be detected early and eliminated in its first occurrence which can help to avoid a compensating error afterwards.

Errors lead to rogue data or dirty data that can compromise important transactions as well as future planning. Automating data entry in accounting can help to avoid errors when inputting invoices, processing payments, or recording transactions because technology is not susceptible to the same kinds of mistakes as people, automation repeats the same information in whatever path it’s told, with no risk of distracting, getting confused, or losing track.