A historic view of the evolution of accounting systems 

The practice of Accounting has been around for many thousands of years and much of what we know of ancient civilizations are gleaned from their accounting records.

As civilization began around villages and developed into empires, scribes invented record keeping systems and kept running inventories of wealth, trade, and tribute payments. Double-entry bookkeeping played a crucial role in Italian merchants’ superior trading skills and some venture that the Renaissance would not have been possible were it not for the double-entry system? Many an entrepreneur avoided bankruptcy during the depression because of their ability to implement bookkeeping principals.

In later years, the principals of bookkeeping were used to grow entrepreneurs into companies and corporations as these entrepreneurs were able to provide detailed accounts of their enterprises allowing for investment by outside parties. This also lead to the introduction of accounting as as profession. During these periods, most of the work of the accountant was done using paper based documents developed around the double-entry bookkeeping principle. Calculations were done by the accountants themselves using only their own arithmetic skills.

The introduction of the profession, along with the knowledge and expertise they brought, also added credibility to complex financial transactions.

Thanks to the invention of electronics, the accountant was able to not only “keep book” of an enterprises accounts, but was able to do more complex calculation allowing for better and more complete reporting. This in turn allowed enterprise owners and managers to greatly improve their decision making abilities.

Today, the world of business and accounting is based on the computer and the Information Revolution. The computer proved to be a perfect fit for the accountant allowing such to efficiently crunch the repetitive transactions of accounts receivable and payable, inventories, and payrolls. The computer gave birth to the electronic spreadsheet and application software, allowing accountants to move from pen & paper to the keyboard & monitor.

As we all know, this explosion continues, with each day being the dawn of a new era. Who knows were we will be tomorrow and what new advances will be made in the field of accounting.

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