The particulars of transaction and financial relationships between different parties have been written up in the form of financial records since the dawn of civilisation, examples being Babylonian clay tablets and records from the Roman and Greek civilisations.
Our present system of accounting has its origins in Renaissance Italy. By the 12th century the bustle and extent of the wide-ranging trading activities engaged in by the Italian city-states had created the need for an effective system of financial recording which could accurately determine the results of large volumes of transactions involving several parties. Consequently, the double-entry system of bookkeeping, the basis of our modern accounting system, was developed.
During the renaissance, this system of accounting became known throughout Europe; by the 16th century it was standard practise in England, Germany and Holland. The first published description of the double-entry system appeared in Venice in 1494. Written by Luca Paciolo, it was entitled Summa de Arithmetica Geometria et Proportionalita.
The 18th century saw the emergence of another factor that exerted considerable influence on the development of accounting, namely the Industrial Revolution.
There was a tremendous increase in the nature and scope of manufacturing enterprises, trading activities had become far more complicated and extensive and therefore effective methods of planning and control were essential. These needs led to the emergence, out of cost accounting, of management accounting, the specific function of which is to provide whatever financial information may be required by the management of the enterprise for the purpose of planning and control.
The influence of electronic data processing (EDP) on accounting has been of paramount importance in the second half of the 20th century. It should be borne in mind, however, that EDP is purely a technology that has produced a dramatic increase in the speed at which large volumes of data can be processed. Although it has influenced the utilisation of accounting information, it nevertheless has had no effect upon the theory. The computer has made accounting information more effective chiefly in that it is now more complete, easier to understand and more readily available.
These days there are a large number of accounting software packages that are available to individuals, small and medium size enterprises and large corporations. The type of enterprise and internal operating systems will determine the type and size of accounting package that is used. In order for the enterprise to make investment decisions, a proper accounting structure must be in place. Accounting packages are just a tool to interpret the ‘language’ of the financial world – an instrument for transmitting information. Users of financial information expect accurate and comprehensive information that cannot be provided by general spoken or written language, so accounting was developed to satisfy this specialised need. By virtue of its nature, accounting information is historical. Historical trends do, however, serve as valuable guidelines for future projections.
By: Michael Russell
Posts Tagged ‘Accounting System’
The Development Of Accounting
December 30th, 2009Insurance Accounting Software: How To Get The Best One
December 24th, 2009
Insurance business has developed and prospered by leaps and bounds in the last few decades. This has not only made their transactions big but have also made them a little more complicated with new insurance policies being launched every day. There are specific business requirement for insurance companies. So, software engineers have produced a number of software for insurance companies.
Any good accounting software in this category packs some startling features that are almost always needed by the companies. These features are easy to use and work much like the manual of a healthcare practitioner’s manual accounting system.
The accounting programs include open item accounting, which is helpful in matching payments made to individual charges. This way one is always aware about what has been paid to whom and what still remains to be paid and to whom.
With these software one thing that always needs to be kept in mind is the customer service and support because most of the experts in this area are of the opinion that if the technical support is not at hand to deal with the question that arise when it is put to process large amounts of data, it is likely to create quite a bit of confusion. So, when you are going for an accounting software for insurance business, lay emphasis on the post-sale technical support available.
Ready technical support should be available online or on phone so that not much time is lost troubleshooting. You might have to shell out a little more for guarantee and technical support. Do not flinch from doing that because it will prove well worth it in due course of time. Getting software with lousy technical support would harm your business instead of smoothening the operations. So, be cautious.
Always keep in mind that insurance business is a data intensive business, which means that you need a software that is very accurate and does not lose on speed when processing heavy data. There are various software that can achieve both speed and accuracy. So, if you could not find one soon enough, look around some more. You need not settle for anything less than what you want.
By: Joann Grant
Computerized Accounting for Your Company
December 12th, 2009
Accounting is the core of any business. It is a process which gives you the information about the financial stability of your business. Each and every transaction that takes place within your organization has to be recorded properly. Without a proper Accounting system, no business can survive in this data oriented world. Accounts data helps to analyze the financial position of the organization, and plan well for future activities. It helps its investors to understand more about the company’s financial objectives.
Accounting is based on some standards and these are known Accounting Standards. Every Organization must adhere to these Accounting Standards. If one organization fails to adhere to these well-defined Accounting Standards, then it will result in complete chaos within the organization and will spoil the reputation of the company.
With the arrival of Computerized Accounting Software, adhering to Accounting Standards has become easy. Accounting Software is built upon Accounting Standards and this makes all the entries made to it follow these standards to some extent. But due care has to be taken while entering transactions, as wrong Account Heads selected can again make problems. In Accounting software, each Account Head is defined under different main groups. When you define these Account Heads proper care has to be taken to ensure that these Account Heads falls under the right group. If this is not the case, then your financial results will show unexpected losses or profits, which is far beyond the reality.
For more details related to selecting an Accounting software please visit Overview of Accounting Software
By: Gijo George