Yes, we all make mistakes. Human error is all part of the human experience. However, how much do we allow ourselves to get away with when it comes to business, especially in the number-heavy industry of accounting? There are monetary consequences to too much human error, so it should be a goal for businesses to reduce the rate of error.
For as much as we’re used to repeatedly doing the same tasks over and over, inevitably we slip up and end up doing something we didn’t intend to do, leading to a less than desirable result. Our brains are imperfect and unable to perform even the simplest tasks with 100 percent certainty each time. Also factoring several internal and external circumstances such as stamina and stress, our concentration can vary.
In the engineering textbook Reliability, Maintainability and Risk by Dr. David J. Smith, he lists the rate of human error for common tasks, taken from years of research from the latter half of the twentieth century. The simpler the task the lower the rate of error.
The more complicated and less routine a task, the more likely there will be human error. These rates are exacerbated by environmental factors such as stress. The rate for error skyrockets to a factor of 0.9 in emergency situations where a decision needs to be made in less than one minute.
With the inevitability of human error, businesses in all industries should account for lost time and therefore lost money.
Click here to continue reading The Cost of Human Error from eFileCabinet, and make sure to register for their upcoming Insightful Accountant webinar on a similar topic, "Let Go of Manual Processes: Embrace New Ways to Work" on January 30 at 12:00 p.m. Eastern Time. You can register here.