Today, we will be looking at how technology is changing the accounting and bookkeeping industry. The field of accounting and bookkeeping has definitely seen helpful changes by the progressive adoption of more technology throughout recent times; we will discuss the positive impacts these changes have had on accounting and bookkeeping.
The Evolution of Technology in the Accounting and Bookkeeping Industry
- The Early Days
We have always searched for an easier way to account for buying and selling of goods and services it all started with the abacus which was used only for simple math functions namely; addition, subtraction, multiplication, and division. We then progressed in adding machines which operated like a mechanical calculator where each value place in the number had its own 1 through 9 buttons to manually input the desired number to carry out the calculation. These machines later evolved into desk calculators and into common digital calculators. With these inventions we took some human error out of the mathematical aspects of accounting since accountants were expected to keep records by hand, this included the general ledger and the sub ledgers such as accounts payable, accounts receivable and others.
- The Advent of Personal Computers
The most significant advances which have propelled us to where we are presently came from the rise of personal computers. The first major spreadsheet program was called VisiCalc and it was originally designed for the Apple 2 computer, it transformed the computer from leisure use to a serious business tool. According to the co-creator Dan Bricklin, it allowed people to take 20 hours of work per week for some people and turn it out in 15 minutes. Not long after IBM was spurred to release its own program named Lotus 1-2-3 for its personal computers. Shortly after its release Lotus 1-2-3 Indian physique Alex run these types of programs now allowed for the calculation analysis and storage of data. These spreadsheet programs eventually gave rise to the ever-popular Microsoft Excel.
- Computer Based Accounting
Shortly thereafter technology gifted accounts with computer based accounting software, these types of programs range from the affordable user friendly QuickBooks to the expensive yet powerful ERP systems such as SAP and Oracle. According to the Journal of accountancy, more than 4.5 million companies use QuickBooks making it by far the most widely used accounting and bookkeeping system in the world while ERP systems are more robust and customizable to handle larger companies. All these advancements in technology have allowed for the elimination of the double-entry and permitted for the storage of all Ledgers in a single system, this also allowed for easier access to ready-made financial statements and other reports.
- Cloud-Based Accounting
The most recent breakthrough and technology being utilized in the business world today is cloud services; the cloud serves to store data and provide sharing services fully online. Using the cloud, users are able to share documents easily between people while allowing for easier collaboration between the accountant and the client. Computer and cloud-based accounting software programs have made the countess job more efficient, accountants and bookkeepers can now track and store data with accounting software from using the program to calculate asset depreciation to store an original asset value and total depreciation to outputting of the current book of value, it also contract dates of invoices and reports aged payables and aged receivables. Processing of data is faster than ever before with better computers in the use of cloud computing, some math calculations are automatically performed by the system now.
How Technology is Changing The Accounting and Bookkeeping Industry
- Financial Information are Produced in Real Time
Gone are the days of keeping the books by hand in separate Ledgers, creating a balance sheet or an income statement is now just a click away with accounting systems financial information and some measurements now can be a produced by accounting software in real time.
- Programs can Also Offer Customizable Reports
This allows tailoring reports with information to meet specific business needs all these allow for easy access to organized data which helps reduce time spent preparing reports. The time saved allows accountants and bookkeepers to use their time analyzing trends and business performance therefore providing better and more in-depth information to management which can help with major business decision making.
- Reduction in the Margin of Error
While people still input some information into the system, the margin of error has been reduced significantly due to auto population fields in the program system connections between departments allow data to be pulled over into other department work. This allows for less calculations and less manual entry driving down chance for entry errors.
Easy Access and Communication Exchange Between Multiple Parties
Advances in technology now allow for easy access and communication exchange between multiple parties simultaneously and using technology such as the cloud information access is more favorable in accomplishing tasks that require collaboration. Now accountants and bookkeepers are able to share documents in a matter of just seconds, before these teams might have to share one source of data cutting productivity of each individual’s assignments now they can be shared instantaneously as well as video services that allow for people to stay where they are at and eliminate travel time for meetings.
Information Exchange with Vendors and Auditors Outside of the Office
This has been made more efficient with the cloud from sending product drawings or specs to paper copies of audit requests, all of these are now fingertips away via the shared online server. If the accounting software data is saved on just a server or just a local computer it could be a risk for data loss. Intentional or unintentional actions could cause equipment failures leading to critical data being lost with no backup, with the rise of use for accounting software, data of this sensitive manner is now stored on servers or in the cloud.
Today, we have looked at how advancing technology has affected accounting and bookkeeping and how the field of accounting and bookkeeping has experienced positive change by the implementation of more technology, in the end the efficiency and the time saved definitely outweigh any negatives that may associated with how technology is changing the accounting and bookkeeping industry.
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