From the early days of the abacus to the advanced systems we have to complete bookkeeping online nowadays, accounting has certainly come a long way. Through its evolution, accountants and bookkeepers have always strived to improve accuracy, increase efficiency and ensure that the growing needs of commerce could be met.
In the last number of years, accounting software has become increasingly important with businesses big and small. Not only do modern accounting systems help businesses to complete their accounting obligations with ease but they also ensure tax compliance and enable business owners and managers to access critical financial data and reports when they need it, at any time of day or night. Although modern accounting software packages offer a range of powerful functionalities and advanced features, it has taken some time for this vital software to become what it is today.
Continue reading to learn about the history of accounting software and how it became such a widely used and essential business tool.
Back in the fifteenth century, following the Crusades in Europe, business began to boom with trading and bartering starting to take place en masse. At this time, many businesses were not able to cope with just an owner, as the demand for their offerings increased. This led to the forming of the first basic companies, meaning that transactions needed to be documented to ensure that the right decisions were being made and that nobody could steal from the earnings. These documents were the beginning of accounting, as we know it nowadays.
Over time, recording transactions became more complex, as traders began to factor in their costs, labor expenses, taxes owed, and other factors that affected their trading. As things continue to progress, people became more educated and the amount of commerce taking place increased, the general ledger that every business owner is familiar with was formed. This remained the primary means of recording business finances until the eighteenth century when machines were introduced to the accounting process.
Back in the early eighteenth century, machines were invented to perform basic calculations. Unlike modern computers, these machines did not have any memory, however, they were capable of producing accurate results. In 1854 in Scotland, the first organization for accountants was founded giving the industry much-needed guidance, helping to establish best practices, and provide more education on bookkeeping.
During the 1960s huge computers were built that were used to manage accounts through spreadsheet programs such as Excel, giving rise to the very first hint of accounting software. As computers IBM developed personal computers, which became smaller and more affordable, the progress of accounting software increased substantially. In 1983, accounting software programs such as Quicken and TurboTax were released, allowing business owners to manage their business accounts. In994, a program called MoneyCounts, offered double-entry accounting, replacing its cumbersome manual entry predecessor and becoming the industry standard, as it still is to this day.
The advent of cloud computing had a major impact on the world of accounting software in the early 2000s. Many of the leading providers reworked their offerings to ensure they were compatible with cloud storage, allowing business owners and their employees to access important information from any location at any time. Today’s modern accounting software packages are easy-to-use, intuitive, and feature inviting dashboards full of colorful graphics and easy-to-digest information.
Modern-day accounting software has come a long way from the abacus of old. As technology continues to evolve and adapt, accounting software will do the same to provide a reliable solution for business owners to streamline their accounting tasks, saving time and money.
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