How Bookkeeping Has Changed
One of the oldest professions on Earth just happens to be bookkeeping. Records indicate that bookkeeping came into existence as early as 6,000 BC! No one really knows who invented bookkeeping that long ago, however a mathematician from Italy name Luca Paciolo is described as the ‘godfather’ of bookkeeping. In 1494 Paciolo was the first to introduce double-ended bookkeeping, which was embraced by ancient Venetian merchants, and is still in use to this day. While Paciolo and other bookkeepers used written ledgers, the 21st century has kept up with tradition, and have introduced new technology.
Bookkeeping didn’t change until the 1970s, when the earliest computers were put into mass production. 1978 saw the arrival of the first spreadsheet software called VisiCalc (short for “Invisible Calculator”). By the 1980s, bookkeeping and accounting changed again. Once a male-dominated industry, by 1985 nearly one-third of bookkeepers and accountants were women. PCs had now become simpler and easier to work with. By the end of the 1980s the world was introduced to two major accounting software pioneers, Sage (Simply) and Intuit.
Continuing to the 1990s, the accounting landscape changed to mainly what we see today. Most of the accounting software had become automated and computers were used more frequently by most businesses. The 2000s was the decade of new laws introduced to prevent scandals and instill regulations. The fall of Enron of California is to blame for these changes, as it quickly became the biggest corporation to file for bankruptcy, thanks to unethical accounting practices. The new laws included higher consequences for fabricating financial statements and ensuring ethical accounting conducts.
Within the past five years bookkeeping has drastically changed, with the introduction of cloud accounting software. With this new software taking hold, it is easier than ever to get your business information to your bookkeeper. This means relationships with clients are no longer reliant on a spreadsheet or a box of receipts. Clients can also use cloud accounting software to record business expenses on the go, get paid faster by sending invoices online and automatically import bank transactions into their accounts. These innovations save time and reduce the risk of human error caused by manual data entry and missed transaction.
With the rise of mobile technology, bookkeepers and accountants have been able to remotely communicate with clients using software options like Zoom, Google Meet, and Skype. During the COVID-19 pandemic, this technology has been essential to continue crucial business guidance to clients. With fewer in-person meetings to attend, geography becomes less of a barrier. As technology reduces the impact of distance, bookkeepers can see an influx of cliental.
What does the future hold? It is said that the accounting software landscape will change with the rise of artificial intelligence. As AI technology improves, time-consuming tasks such as inputting and reconciling transactions can be automated. Regardless of how technology evolves, its likely that bookkeepers and accountants will spend less time on compliance and tax returns and more time on helping clients and businesses grow.