Evolution of Bookkeeping

• Ø  What is Bookkeeping?

Bookkeeping is “the practice or profession of a person recording and defining accounts and transactions of a business.”

• Ø  Since when did mankind start recording data and transactions?

The history of bookkeeping starts sometime around 4000 B. C. (before Christ). During that time the established way of keeping track of business or transactions was normally done with tokens instead of written forms. Land ownership was tracked by bookkeeping as far back as 8000 B. C.

Archeologists have unearthed clay tablets which show contracts being used in Assyria and Asia. The tablets have been carbon tested and are shown to date back to 4000 B. C. The tablets show some form of ancient bookkeeping (not accounting), recording contracts, containing many different important transactions such as marriage dowries, wills, lending and borrowing – even lawsuits.  So they even had lawyers in those days!!!

• Ø  Evolution of Bookkeeping

In 1494 bookkeeping begin to develop into the more detailed system that we know today. It was then that Italian Luca Pacioli, at age 50, wrote the first book that dealt with bookkeeping. In his book Pacioli went over a very detailed way that bookkeeping is used, and that process is still in use today. That book made Pacioli the father of bookkeeping.  Benedetto Corugli also wrote a book. It showed a process that is known as double entry, a fundamental element of a successful bookkeeping process. Double entry bookkeeping records transactions into two areas, and has more controls than single entry bookkeeping, and therefore more likely to be accurate.

Bookkeeping has since morphed into the electronic age, now very few businesses will even use the paper ledgers of the past. Switching instead to computerized bookkeeping systems. There are many out there to choose from, including specialized bookkeeping systems for specific areas of industry.

• Ø  Need for Professional Bookkeepers and Accountants

But these computer programs are not without their flaws. Human failings cannot prevent the miss posting of transactions, and therefore the role of a professional accountant has become even more important now. Professionals still need to check and ensure that the information has been entered correctly. Though many of the computer programs for bookkeeping/accounting have set in place controls and checks, they are still limited and you just can’t beat the human touch.

Business has come a long way since the earliest history of bookkeeping and the days of tokens being used to keep track of transactions. Computers and information technologies have made bookkeeping more technically challenging, and as organizations grow in size the advanced systems that are required necessitate specialized training.