Changing Times: An Accounting History Lesson

A long, long time ago, when ancient civilizations ruled the earth, accounting came in to being … at least that’s what Wikipedia tells us. Needless to say, accounting is a tried and true profession. It’s also being affected by technology … just like everything else.

Ledgers & liquid paper

When I was younger, my mom was the bookkeeper for our farm, as well for a few other side projects. In her role as a bookkeeper, she kept track of everything by hand. She would use hard black ledger books with 14 column paper and record things in pencil. Hence the need for the best pencils on the market … as good as accountants are, sometimes you need to erase things and redo them. My mom even had liquid paper, the same color as the green ledger paper (because accountants are anal like that).

Accounting software

Fast forward a few (okay a little more than a few) years and I’m an accounting professional. In my 14 years in the profession, I’ve never used 14 column paper. I’ve had a couple clients hanging on to it, but they’ve always been rare. Rather, I typically use accounting software to help my clients with their financials (looking at you QuickBooks).

The advent of accounting software allowed businesses to operate more efficiently and changed the way accountants and business owners worked. You could open your snail mail and key in the necessary information, then print off checks to get the bills paid. The systems could even print invoices and track payments from your customers, all of which came in the mail.

The initial accounting software was somewhat easy to use, affordable and did all the basics … without the need to put pencil to paper.

Automation & efficiency

Somewhere along this path, we realized that paper copies could easily be replaced by paperless technology and increased automation. So technology changed accounting again. Rather than having a specific “accounting computer,” technology and applications moved to the cloud and could be accessed from anywhere, including your mobile phone.

Today, accountants and bookkeepers can access real time information faster than ever. They can take a picture on their phone and have it uploaded and coded instantly into their books. Bill pay is now automated and invoices magically appear via email, directly from your cloud accounting system. Point of sale systems are helping retail businesses, and talking directly to your accounting system.

When all this technology works together, it’s accounting magic. You now have interacting systems that record data in real time and allow you to have clean books and accurate financials in order to make sound business decisions. In other words, you have instant access to your numbers … and that’s a good thing.

The moral of the story

While all of this technology is making us more efficient, it’s also eliminating the human factor. No more licking envelopes and mailing paper bills, or keying in data at the end of the month. But this isn’t necessarily a bad thing. Technology is allowing bookkeepers, accountants and business owners to focus on what matters and not get wrapped up in the busy work.

Yes, it’s scary because it sounds like some of your staff (maybe even you) are being replaced by technology. Trust me, I understand (remember, I’m an accountant too). But it’s really okay. What technology is doing is automating the parts of the process that were subject to human error and making them more precise. This allows us numbers nerds to devote more time to analyzing the numbers and getting them in your hands must faster. It’s helping you make smarter business decisions.

 

 

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