One of the primary ongoing tasks of any accounting manager is to avoid data entry errors, since they cause errors in the reporting of financial results and can be extremely time-consuming to locate and correct. Some traditional techniques include dual data entry with matching by the computer to spot discrepancies, as well as bar coding. More recently, Internet-based forms require customers to enter their own orders, while RFID promises to yield additional improvements in data entry error rates.
One of the key problems that managers tend to overlook is the massive disparity in the error rates for the keying of alphanumeric data versus numeric data. There are many studies on this topic whose results vary by such factors as the size of the keyboard used (bigger is better) and the skill of the typist. However, the relationship between the two error rates is clear enough – entering alphanumeric data through a keyboard is 100 times more likely to result in an error than numeric data entered through a keypad, assuming the skills of a normal 60 word-per-minute typist. The error disparity drops to 25x for an expert typist, but the difference is still enormous.
How does this impact the accountant? Clearly, it makes a great deal of sense to replace as much alphanumeric data as possible with numeric data. For example, warehouse bin locations could be converted to numeric codes instead of the more common Aisle A, Rack 3, Bin R style. Similarly, product codes should be purely numeric. Also, don’t try to create different versions of an invoice, such as invoice number 1234A. Further, avoid using transaction identifiers, such as a purchase order that is coded as PO-45678. By focusing hard on using just numeric codes, an accounting department can drastically reduce its keypunching error rates.