Accounting is one of the oldest professions, and one of the most technologically friendly. Dating back to bookkeepers who tallied numbers on the abacus and those after them who bent over adding machines, the managing of money and the technology to quickly add and record transactions have always gone hand in hand. Over time, accounting has evolved along with technology. The changes were subtle early on — adding machines and calculators are relatively new — but once computers began to allow accountants to track and calculate numbers, accounting technology progressed exponentially.
The Impact of Technology on Accounting
Accounting technology as it is used today really began in the 1970s. Computers had started to become a standard fixture in most offices, and ledgers in which every cost and payment were entered by hand began to fall by the wayside. Adding machines, calculators, and ledgers were almost eliminated. Early technology-friendly accountants enjoyed greater efficiency and improved accuracy.
At the same time, businesses were expanding. Some companies extended operations throughout a county, region, or country, and others began to seek funding to start or grow their businesses. Technology was making the world much smaller, while better accounting methods meant that companies could enlarge operations, whether that meant adding an extra register or opening a new location across town. Financial statements could be used to obtain funding from banks or be published to attract stock investors, and business owners as well as department managers could trust in the accuracy of the numbers.
The Rise of Cloud Accounting
Eventually, the Internet became a standard fixture in public use. Companies used the early technology to communicate financials between departments and locations, making sure that the files arrived intact and accessible by whatever operating system or program they chose. Plus, rather than needing workers to process that information, programs could analyze it much more quickly, and even present graphic interpretations, allowing accountants to send management colorful dashboards that made the relative value of the figures clear.
As accountants and managers have become more familiar with these technologies, cloud computing has become a reality. No more sending files as attachments. Instead, one can send a link to teammates, department heads, or supervisors, and they can reach the file online from wherever they happen to be. More importantly, the analysis of that information, using the most up-to-date programs, can also be accessed from anywhere. Managers can pull the most current information available to see how the department or company is progressing toward its goals, and make immediate working adjustments and strategic decisions in response.
Why Cloud Accounting is Here to Stay
Both small businesses and large companies can benefit from using cloud accounting software. Not only is it efficient and accurate, but the on-the-go business insights that it provides are irreplaceable, and unattainable in any other way. Cloud accounting tools, such as Sage One online accounting software, are rapidly gaining ground because they simplify accounting efforts, make invoicing easy, and offer up-to-the-minute insights into business operations and project costs that would be difficult to find otherwise. They also make paying taxes and doing payroll a snap.
Although it is seeing considerable use, cloud accounting is still not as widespread as it could be. According to AccountingWeb in December 2014, almost half its members support clients using a cloud accounting system, but “when the wider business population is taken into account (including SMEs and accountants who don’t ‘get’ the Internet), the proportion is lower — about 4-5 percent.” But that doesn’t mean it won’t get there. Cloud-based money management tools are everywhere, from online banking to shopping, and there is already a range of cloud accounting products for both personal and business use.
The technology of accounting has a long history. It has moved from manual tokens through paper entry, calculators, computers, and ultimately the cloud, as the need for more up-to-the-minute business insights were needed. As society as a whole makes the transition to cloud based services, the efficiency and accuracy of cloud accounting will continue to attract users.