History of accounting
Accounting is considered as the “oldest career” according to the notes compiled by Prof. Linda Plunkett of the College of Charleston, S.C. in 1979. This can be seen in the fact that prehistoric households had to account for food and clothes in preparation for the chilly seasons.
When man started trading, the concept of a financial system was born. The Babylonian empire and the Code of Hammurabi contain evidences of accounting activities.
Then the time came when taxation was born and governments had to retain document in order that social order was kept.
Today, accounting uses money basis, accrual basis, and variations of these.
However, with the birth of the internet, accounting software packages are being offered that promise efficient and costless accounting. This is why many businesses are getting rid of their accountants and shifting to accounting software. How efficient really are these software? What benefits do these offer that attract business owners?
-Cost- accountants have undergone formal training. In the US, they are called Certified Public Accountants while in Canada and the UK, they are known as Chartered Accountants. Their degree takes about 5 years to complete with grueling exams and a series of final exams. With this, their services really come with a price. There are some that charge by the hour or have a fixed fee. Some others even charge even while they are being consulted over the phone. But however they do their charging, this still means an additional big burden on the company’s budget.
Accounting software, on the other hand, can be very affordable. The company only has to spend for the purchase of the software and the training of the person in charged with its operation.
-Time Schedules- accountants charge for each minute that they work or stay in the office. And when there are deadlines and some overtime work is needed, accountants have to be compensated for the overtime work they do. Comparing this to the accounting software, it can work straight for 24 hours without paying it extra.
-Security of information- when a company hires an accountant, there are agreements or contracts that are signed into which ensures confidentiality of information. Though this may be true, the fact still remains that a third party has this type of important information. There is still the chance that these information will reach the ears and fall into the hands of the public.
Accounting software does not reveal anything and keeps all these information within the business.
-Ease of use- business owners who do not have any background of accounting do not have to worry. Accounting software packages today are very user-friendly. With training, anyone can get around with using it.
-Improved business performance- with the use of accounting software, work is made easier and more convenient. As a result, employees have more time to work on other concerns and thus, become more productive.
Accounting software packages are advantageous. However, it cannot really substitute the performance of an accountant. If a company can have both, it would be much better but this may lead to redundancy. Perhaps, what may be done is to just hire an accountant on certain situations and not hire one as a regular employee.
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