History of Accounting Systems since Before Da Vinci


How Accounting Has Been Changed Over Time By Technology

Luca Pacioli (1494) was the first to describe the systems of debits, credits, journals and ledgers. Pacioli's writings are the basis of modern accounting. Summa de Arithmetica, Geometria, Proportioni et Proportionalita ("Review of Arithmetic, Geometry, Ratio and Proportion"), a twenty-seven page treatise on double-entry accounting, was one of the first items to be published on the Gutenberg printing press. Leonardo da Vinci was one of Pacioli's students in Milan. 

The Modern Accountant

Before accounting computer programs:

  • Entries were done manually
  • Mistakes could mean hours of recalculation and "missing" money
  • Finding errors was tedious work
  • Stereotypical introverted/glasses-wearing/math nerd/pocket-protector image is perpetuated

After accounting programs:

  • Eliminated calculators, paper ledgers, and pencils
  • Lowered the margin for error
  • Made mistakes easy to find and correct
  • Got the job done faster

2010 saw 1,216,900 employed accountants.

  • Expected job growth of 16% (average)
  • Average annual wage at $61,690
  • 1/5 work more than 40 hours a week

Computers have changed the nature of accounting, turning it into a fast-paced and dynamic profession.

The beginning of the shift in accounting technology came in the form of simple spreadsheet programs.

VisiCalc - 1978

  • Upgraded companies from manually calculated spreadsheets.
  • VisiCalc pioneered automatically updating cells

Quickbooks - 1998

  • Quickly dominated the market for day-to-day bookkeeping
  • Over 80% of bookkeeping using Quickbooks
  • 4.5 million companies use QuickBooks
  • The most popular accounting program in the US

SaaS (software as a service) Accounting

  • Web-based
  • Secure hosting locations
  • Clients and accountants collaborate on the same information
  • For most companies, moving to the Cloud reduces IT expenses from between 30% and 70%

People skills have become just as important as keeping the numbers in check. Because of these automated programs, accountants have more time to:

  • Interpret data
  • Give good financial advice
  • Suggest smart business decisions
  • Be more involved in their client's business

Now accountants are expected to recommend best-practices to management and suggest ways to reduce costs while improving profit. The stereotypical "task-oriented" accountant is outdated as is the the "shoe box full of receipts". The accountant has become a business consultant rather than a mathematical tool.

Sources

http://inventors.about.com/od/astartinventions/a/History-Of-Accounting.htm

http://www.resgroup.com/how-computerized-accounting-systems-have-changed-world-numbers

http://logica.ugent.be/albrecht/thesis/FOTFS2008-Heeffer.pdf

http://community.accountantsworld.com/home/2011/7/8/did-quickbooks-break-client-accounting-the-poll-results-are.html

http://accountantsone.com/jobseekers/CloudComputing.pdf

http://www.ehow.com/about_5431873_computerized-changed-way-accounting-done.html

http://www.journalofaccountancy.com/Issues/2011/Dec/20114555.htm

http://inventors.about.com/library/weekly/aa010199.htm

http://www.bls.gov/ooh/Business-and-Financial/Accountants-and-auditors.htm#tab-2

Peter Heinicke

Peter Heinicke

Chicago area ERP consultant with over 40 years of experience in Sage 300, Sage Pro, Quickbooks ERP and other systems


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