The history of accounting

Published on: November 16, 2018

The history of accounting
Accounting is thousands of years old; the earliest accounting records, which date back more than 7,000 years, were found among the ruins of Ancient Mesopotamia. At the time, people used accounting techniques still used today in determining crop surplus or shortage.

During the Middle Ages, bartering was the primary form of money-change, but when Europe changed to a monetary economy in the 13th Century, merchants began relying on bookkeeping to keep record of multiple transactions.

Double-entry bookkeeping first emerged in Italy in the 14th century, where trading ventures began to require more capital than a single individual was able to invest. Luca Pacioli wrote his “Summa” dealing with record keeping and double-entry accounting, one of the very first published books that became the accounting “textbook” for the next 500 years.

Why is the history of accounting important to us?
Accountancy, as old as civilization, is one of the most trusted professions around the globe. Accountants participated in the development of cities, trade, and the concepts of wealth and numbers. Accountants invented writing, participated in the development of money and banking, invented double entry bookkeeping that fueled the Italian Renaissance, saved many Industrial Revolution inventors and entrepreneurs from bankruptcy, helped develop the confidence in capital markets necessary for western capitalism and created the NY stock exchange. Accountants are central to the information revolution that is currently transforming the global economy.

In 1904, 50 years after the emergence of the formal profession, about 6,000 practitioners carried the title of chartered accountant. In 2008, there were 1,762,000 accountants and auditors in the United States alone.

It’s important to us at Binary Stream because our products take the art to the next level. With amazing functionality and incredible integration, our solutions make business processes so much better.

Accounting and technology
Every accountant knows that accounting is the language of business. That language has gone through many changes throughout the ages. But through all the changes, technology has always played a part in making the accountant’s job just a little easier from the abacus, to the first adding machines, calculators and then computers and software. As our knowledge of technology increased so has the accountant’s ability to analyze statistical values. Technology has enhanced the ability to interpret data efficiently and effectively. Accountants now can interpret the language of business with the right financial solutions with such ease that they have become a corporation’s most trusted business advisor.

While the principles remain the same, the tools have drastically changed. The need to efficiently manage massive amounts of complex financial data necessitated the development of Enterprise Resource Planning (ERP) solutions. Through ERP solutions, accountants armed themselves with management information that spanned an entire organization, embracing finance, accounting, manufacturing, sales, service and customer relationship management, and made themselves even more integral to the success of their organizations.

Accounting today
Today, accountants can run Dynamics GP, 365 (AX & NAV) on premise or the cloud, and run reports on tablets and smart phones. Information can come from several different systems using a Web interface.

As we continually improve systems, Accountants are free to leverage the knowledge and advantages offered by technology. With increasing prevalence of mobile technology and faster networks, people expect to have up-to-date information available wherever and whenever.

Businesses today, require information not two weeks after month-end but immediately; performance must be available at the push of a button.

“Accountants have to stay in touch with changing trends in business, technology, rules and governance,” said Dave Brougham, CMA. “With the world getting smaller, economies growing and technology providing instant access to information, the accounting profession has had to evolve.”

Accounting technology has eliminated the number cruncher sitting behind a desk and has allowed the accountant to find new challenges with much more to offer then decades ago when they relied on an abacus for a calculating tool.

No one can see into the future. However, it doesn’t take a crystal ball to know that tomorrow’s accountant will strive for the same goals as today: deliver the highest quality of service to their organizations while minimizing work and maximizing profitability. Technology will continue to be the key enabler, and we will continue to lead in providing the best tools to enhance their ability to do what they do best, and not waste time and effort on inadequate technologies.

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