Introduction to Accounting Technologies

accounting technologies

Historical Background on the Advances in Accounting Technologies

Based on archaeological evidence, the ancient civilization employed different methods to keep track of their economic actions. One of the methods involved using small tokens. According to SchmandtBesserat, tokens were kept in clay jars and they embody economic proceedings. For instance, an entity’s balance statement is reflected on the quantity of tokens present in the clay jars.

Graphic portrayals were also used in keeping records. Sumerians and Egyptians documented their business transactions on papyri and clay tablets not only to keep track and safeguard their properties, but also to demonstrate that the people involved in the transaction did their part.

The Greeks’ and Romans’ alphabetic system emerged from the limitations associated with the Sumerians’ and Egyptians’ pictographic system. Letters and numbers were used in documenting economic transactions on papyri, parchments, and potteries. Alongside an abacus, Romans integrated the Roman numerals in making business-related calculations. It was observed that the Romans kept their financial records in physical and monetary measures. When the Roman Empire collapsed, there was a localization of the record keeping system. Similar to earlier versions of the Greeks’ and Romans’, financial data were stored and organized using parchments, papyri, and then with tally sticks. This suggests that there are promising advancements in accounting technologies.

In Italy, a double entry bookkeeping system was devised in response to an increased importance on trade and commerce. Later on, it was developed into a more refined model that showed and guided financial data. This became the basis and foundation of today’s accounting system.

The economic progress in several industries resulted to an increase in demand for a more organized and systematic way of planning and managing economic activities. In line with this, the use of document control registers and writing boards were incorporated with repetitive data processing works, which resulted to enhanced efficiency in bookkeeping undertakings within companies.

The mechanization of accounting processes started with the use of cash registers, posting machines, and accounting machines. These were later developed into Hollerith’s punch card system, then to International Business Machine’s (IBM) tabulating machine. During the World War II, IBM introduced the first generation of mainframe business computers. Not that long when the era of transistor technology replaced the earliest version of computers. Years later, IBM’s System 360 was launched and software like Database Management System was used by companies. Then came the age of software, hardware, and LAN technology, which were incorporated in computing, communications, and database management tasks. These successive developments in accounting technology are seen to continue, especially since there are emerging concerns and problems related to accounting. Therefore, further advancements are only necessary.

Technologies Used in Accounting Today

  • Software

Different software are being used in major accounting processes. These include accounting, audit, word processing, and graphics software.

An important part of the accounting information system, accounting software documents and processes accounting undertakings such as accounts payable and receivable, trial balance, and payroll. Large enterprises contact trusted programming entities when using accounting software.

Companies can choose from three different types of accounting system software. Turnkey systems such as Enterprise Resource Planning (ERP) systems and Oracle are systems that are totally completed and proven- and are ready to be enforced in business processes. In backbone systems, the primary logic has already been pre-configured. From there, the vendor will devise the client’s desired user interface. Lastly, vendor-supported systems are systems wherein the software vendor outlines, enforces, and keeps up the client’s system, hence termed as customized systems.

Through audit software, auditors can do their jobs in a computerized setting. Software packages are commercially available and are intended to be utilized by auditors only. Moreover, digital audit trails used by auditors can be accessed with computer technologies.

In creating word documents for reports, billings, and financial statements, word processing software comes handy. If financial data needs to be presented in graphs or tabulated forms, spreadsheet applications such as Excel and SPSS Statistics can be used. In case that photos and charts are necessary in order to visually and clearly demonstrate a topic, auditors can rely on graphics software.

  • Cloud Technology

Off-site web hosting or cloud is among the emerging innovations in accounting applications. In saving data, companies need not to install a software or program directly in their computers. Instead, they just have to connect on the Internet to access and store their data. Through this, enterprises will be spared from expenses associated with purchasing and maintaining software and hardware. Entities simply have to sign up with a cloud provider in order to use the space in storing files and programs offered by the cloud provider.

  • Enterprise Resource Planning (ERP) Applications

A publication from the California State University, Bakersfield described ERP systems as “software packages that use relational database technology to incorporate several parts of an entity’s information system.” Corporations that have merged with and/or acquired other firms with different systems often employ ERP systems to assimilate diverse information systems, thereby ensuring enhanced data reliability and processing adeptness.

  • Customer Relationship Management (CRM) Applications

CRM pertains to the measures, schemes, and technologies that entities employ in order to supervise and assess customer interactions and data. Systems like these were devised to gather customer data using the firm’s website, e-mail or snail mails, and social media, among others.

Programs that were created for CRM purposes consolidate customer data and record them on a database where it can be conveniently accessed and managed by business owners. Other uses of CRM software include sales force, contact center, and marketing automation.

  • Social Media

LinkedIn and Facebook are among the social media platforms that are frequented by accountants and other business executives. According to a CCH Technology Survey, the benefits realized in using social media include knowledge sharing, finding new clients, and interacting with other accounting professionals as well as those who can strengthen the company. However, being engaged in social media poses security and privacy concerns and interruption from other professional obligations and duties.

  • Mobile Devices

A global information services company reported that firms, regardless of size, are opting to use hand-held devices such as smartphones instead of personal computers and laptops. A survey conducted by ORC International showed that professionals correspond with their clients, either through text messages or emails, using their mobile devices.

Mobile applications, which can be accessed on any smartphones or tablets, are also being utilized by professionals on their day to day accounting duties. However, security issues and complex concerns are associated with mobile technologies. Nevertheless, merits such as improved client service, support for mobile workforce, and enhanced professional adeptness can compensate with worrying matters accompanied with the use of mobile devices.