How Accounting Developed

It is a well-known fact that every business on the planet will need some type of accounting and software system in position from the very first day. This is because the business proprietors can keep track of what's going in and out the company banking account and so that the tax man knows just how much tax to ask you for. Accounting systems have evolved through the years though. Let us have a look at exactly where they have come from as well as where they might go in the near future.

In the beginning, accounting was done by means of keeping a type of journal. Any money which was spent was noted as a negative and any earnings as a positive. There was no real indication of assets in that journal, only cash coming in and going out. Assets were tracked in a separate journal. The cost of the actual asset as well as when it was purchased and, if sold, if it was sold and for just how much was tracked in that ledger. The early company man also kept track of who owed him money as well as who he owed cash to.

Before long this financial tracking was formalised. A set format for the various ledgers as well as books was developed. Everyone was specifically trained to make use of these formats so that anybody would be able to take a look at a business's books and find out if they were profitable or not and where the issues lay.

Then came the development of computers and accounting and software met soon after that. Just about all accounting is done with the use of some type of software at the moment. It may be a straightforward set of books utilizing Excel or it might be a complicated payroll system of some type. All of it depends on exactly what the clients are able to afford and just how complex and big the business books are and how many accountants there are in the industry.

As time goes on, it may be possible to have your own accounting and software integrated to such an extent that not much must be done by an accountant. It might be possible to have the accounting program draw its own bank statements and also to monitor transactions electronically. All that will have to be done is a petty cash book as well as scheduling or requesting of the various reports on a month-to-month or annual basis.

As you can see, accounting has come a long way from where it started. It has become much more formalised and much more automated. It is now up to the actual accountant to set up the relevant data and also the software program does the rest. In the future it may be possible for accounting and software to be integrated to the degree that the accountancy firm becomes all but unneeded. There is no telling what the future actually holds though. All we are able to really do is wait and see what goes on. In the meantime, accounting and software have a great romantic relationship that benefits businesses everywhere.

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