By : Frank Osgood
Accounting has had a much more interesting run than one would think on first consideration. The man regarded as the father of modern day accounting Luca Pacioli, was one of Leonardo Da Vinci’s contemporaries and intellectual associates – he was one of the greatest thinkers of the Renaissance and also a magician – in fact much of his mathematical explorations and writings were closely linked with his interest in magic. If we head back to earlier eras – we’ll be able to chart the evolution of accounting from counting tokens to today’s more sophisticated payroll systems.
Tokens and Envelops
In the ancient cities of Mesopotamia and Jericho, accounting was carried out by means of a barter system. Currency in those days came in the form of tokens and clay balls inscribed with images of different agricultural goods to denote worth and value. This then developed into a system that can be regarded as an early example of cash flow monitoring – which included envelopes as a way of storing tokens – different envelops represented different people in society, and the shares they had with the different aspects of the agricultural sector.
This was the choice of accounting made by the ancient Sumerians, who used markings on tablets to be able to keep track of currency and precious raw materials. The abacus had also been used as a counting system – but being so basic and not as much help when on the recording front, it was papyrus that became really helpful when it came to keeping and giving receipts and working out deductions.
More Tablets and Letters
The next stage in the timeline of accounting passes through the iron age, when the markets across the world, in across the east and west began expanding the use of metalwork, the need for more detailed accounting increased; coupled with the invention of the Phoenician alphabet, and the emergence of currency, accounting started to take shape in a away much closer to accounting as we know it in the present day.
21st Century and Today
The development of accounting is closely aligned with the development of modern society. In fact, accounting records have been integral to shaping our own knowledge of the history of the world. Today the finance and banking industries have advanced greatly and are more important than ever before to the growth of modern society. Like most aspects of modern life, technology has become key to accounting, and many technological developments take place because of demands within the financial sector. Aside from technology experts populating the banking and financial sectors, many businesses are also using cloud software for accounting and payroll processing too.
This article was written by Frank Osgood. Having learned his trade at a boutique London accountancy practice, Frank now works as a freelance finance and business writer and advisor.