Bookkeeping has a long history which can be traced back somewhat around four thousand years back. The history records suggest that the very first person to develop a bookkeeping system was Fra Luca Pacioli who was an associate of Leonardo da Vinci. Fra Cu Pacioli was a well known mathematician and he imported this bookkeeping system in the 13th century when the merchants wanted to track down their finances and sales. To date, that bookkeeping system is being used by all businesses to maintain a record of their finances and tracking their assets as these are essential for calculating business sales and profitability.
There are two prominent names that have made great contributions to the industry of bookkeeping; one is Fra Luca Pacioli and second is Benedetto Cotrugli. Fra Luca Pacioli is also known as the father of bookkeeping as he is the one who discovered various bookkeeping tools such as ledgers and journals. Benedetto Cotrugli is the person who invented the double entry bookkeeping system. Another important contribution made by Contrugli is that he codified and wrote a book on the various accounting processes that are to be used in the bookkeeping act.
The Beginnings of Bookkeeping
In an unwritten format, the process of bookkeeping came into being when people started using tokens to maintain a complete record of all trades. In about 8000 B.C, a simple bookkeeping system was developed in Jericho which was used to maintain a record of the properties that were owned by the kings. With time, the merchants and other small traders also started using this bookkeeping system for tracking their finances.
Many new discoveries started coming up as the time progressed and it was in 4000 B.C that the clay tablets were used to carry out the bookkeeping chores. These clay tablets were used by all the businessmen to record the finances of their businesses.
The present day bookkeeping system is made up of business ledgers, balance sheets and other types of financial statements that are used to track the finances of a business. All small businesses and large companies need to use a bookkeeping system to track their income and expenditure, asset information and the tax statements.
The history of bookkeeping shows that although the face of bookkeeping operations have changed tremendously in the past, now it has become a reliable and a must have component for every trading business. The things that a bookkeeping system makes easy for business owners are maintenance of financial statements using balance sheets, managing the monthly financial operations and carrying out tax planning in a planned way. It can be said that with bookkeeping, it has become much easier for all business owners to make big decisions in their business that involve the overall operations and finances.
If used in an appropriate manner, bookkeeping system can yield enormous benefits to the business owners giving them time to concentrate on their business.