Accounting Practices - Journey from Ancient to Contemporary

Accounting is the process of keeping all the financial information of a firm or business in a way that helps knowing the status of the company in terms of profit and loss. Basically, accounting is known as a series of actions in which reporting of assets and liabilities are included. Moreover, recording and verifying the expenses and income are the regular proceedings of accounting services in general terms.

It is believed that the men have been doing accounting practices since the days when the human civilization was at its first stage of development. When our ancestors started living near river side or where the water was in existence the occurrence of agricultural movements got started. They developed a process of keeping accurate records of agricultural outputs. They gave these agricultural outputs for some other goods or whatever they liked to one another and for reminding those exchanging, they would create the earliest accounts for that giving taking process.

The New Testaments and Quran have clues to find out the earliest accounting practice describing about trade accounting. In the middle 7th century A.D, Muslims had an interaction with accounting systems according to the Arab writer, Taymiyyah.

Birth of Accounting/Accountancy

The man behind the modern accountancy practice is Luca Pacioli (1445-1517). His book ‘Summa’ was taught in the schools of northern Italy based on methods of keeping accounts and his methods of keeping accounts was used by the merchants of Venice. He was the father of modern day ‘Double- Entry Bookkeeping System. In Double- Entry Bookkeeping, for each transaction, there is a debit and credit transaction.

Types of Accounting

As the time grew accounting practices got a new definition that requires a lot of reliability and efficiency of work. Today, there are separate fields of accountancy; below are the kinds of accounting:

-Management Accounting
-Financial accounting
-Tax accounting
-Open- Book Accounting
-Accounting scholarship

What Accountants do?

Accounts are handled by a team of accountants including Chartered Accountants or in a small firm it can be managed by an individual one. More than one professional are required in a large scale firm to manage the accounts. In general term accountants do a processed work of maintaining ledgers and transactions keeping in mind below mentioned accounting basics:

-Debit what comes in and Credit what goes out
-Debit the receiver and credit the giver
-Debit all expenses & loss and Credit all incomes & profits

Keeping in the mind the accounting basics mentioned above accountants maintain monthly and quarterly management accounts, final accounts, sales tax, VAT, audit, compliance forms or returns and bookkeeping is also included in accounting services.

Modern Accounting Practices

Accounting practice due to the advancement of science and technology can be managed by some applications/software. These software has made the task of accounting easier than the days of past where accounting was done manually on bundles of paper. It would create the situation of dilemma when a comparison was to be made among more than three or four years’ accounts.

Today the market is facing tough competition and many ups and downs comes in the way of business to lead it properly. Choosing Backoffice accountancy practice is always been a confusing matter for the clients who want services for that purpose. Instead of concentrating on the accounting process required for the business, most of the clients worry about the pricing.

First of all, any business for creating final account and VAT should think about the complexity of the case, available back up files, to generate the account what application or software will be used, expected time to complete the accounts. These things are very common for accounting practices but it seems the mentioned processes are not being applied properly in the process of creating accounts by many a firm which creates situation of further confusions and problems.

So deciding the right Accounting Practices service should be at high priority to maintain the accounts without any hindrance.