The Evolution of Technology in Accounting

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The improvement of something in the world is fleetingly described by the word evolution. Evolution is in many segments which are indispensable to our life style. Some of them are accounting, politics education, sports, communication and transportation. All the evolution is carried out for upcoming of people from struggles. “Every action has positive and negative effects”, evolution is not an exception. Over the last ten years, our lives have intensely changed as a result of new technologies. For many of us, the ways we live and do business have altered forever. The tipping point of these new technologies has produced a new division of the global workforce, letting people to work from the reliefs of home while travelling and exploring the globe. This has also rapidly enlarged our ability to share information and upsurge our social and professional networks. When we think about education field, in pre-literate societies education was usually informal. Brothers and sisters and adult kinsmen look a part in transmitting social values regarded as important.

Through observation and direct contact, the child developed the knowledge of folkways and values of the group as well as the training in practical techniques and skills. Though mostly informal, it was not entirely devoid of formal elements. The formal type of training consisted of the start rites. The initiation services were frequently elaborated and included instruction or deal periods of testing. According to Margaret Mead, some primitive societies, such as the Maori, upheld a sacred college for the formal training of priests. There was ample absence of physical punishment, yet the behavior of the children was exemplary. They were obedient and there was little need for external discipline. Though formal type of education is not completely missing in pre-literate societies, yet they were not habituated to the modern halls of learning, large teaching staffs, grading system, degrees etc. Unlike present formal education, it kept continuity between one generation and the next. The child of a farmer was not turned into farmer and that of the farmer into a lawyer. By the way like education sector all sectors are evolved by the people in the world. Among the sectors which are evolved accounting is very significant. Determining when an economic event occurs and an accounting deal should be noted is a matter of judgment. Increase accounting looks to match revenues and expenses based on the business cycle of the firm rather than with the actual inflows and outflows of cash.

Although cash basis statements are modest and make good sense for many individual taxpayers and small businesses, it can result in confusing financial statements for larger units. Accrual accounting seeks to match the revenues earned in a period of time with the expenses incurred to generate them, regardless of when cash comes in or goes out. Different types of commercials will have different practices/rules for the acknowledgement of revenues and expenses. A marketing store will record sales when the transaction occurs, a contractor working on complex project like a building may record revenue at set marks in the agreement. Matching costs with revenue will also follow a set of instructions so as not to gradient profit or loss over various time periods more than is warranted. Book keeping is the recording of all the economic activity of sales of organization made, bills paid, capital received as individual dealings and brief them periodically. Except in the smallest organizations, these transactions are now recorded electronically; but before computers they were recorded in actual books, manually.

Accounting professionals plan the accounting systems used by bookkeepers. More importantly, they establish the internal controls to guard company resources, the application of accounting standards leading the preparation of financial statements, management reports and tax returns based on that data. This also spread over to the filing of required accounting reports within seconds and other agencies for bigger, public and private companies where required. External auditors who validate the accounting records and direct an opinion on financial statements are also accountants, as are management, tax and forensic accounting experts. A key principle of accounting is the division of responsibilities, especially in smaller organizations, in order to prevent scam. For example, the same person shouldn’t be taping the receipt of cash and also managing cash deposits.

Established by E.M. Goldratt as a response to the criticisms of traditional cost accounting, the TOC states that the traditional variable costs of Cost Accounting do not apply, or rather, they apply with less rigor in a modern management situation. In the past Employee was seen as a totally variable cost, workers would work to the management’s discretion and short time and layoffs were said by the level of production requirements. Goldratt argued that this was no longer the circumstance as changes to society and regulation had meant that the workforce was more of a fixed cost for the organization. The TOC states that even though modern managers are still estimated by labour use, such productivities can lead to choices which harm the organization rather than help enhance production. This criticism led Goldratt to develop the TOC as a substitutive system, recognizing constraint as a decision related concept in the service or production development.

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The central idea to TOC and TA is that each organization has an exact goal which can be provoked by decision making, better decision-making leads to better completion of the destinies. If one takes the normative hypothesis of a profit orientated organization as the intensification of the owner’s wealth, then the goal unit will be the throughput contribution which is similar to the total contribution marginal costing. The difference in TA is that through put contribution is defined in the TOC as Sales, less total variable cost which is he cost of raw materials. This is placed in the context of two further conceptual mechanisms, Investment, which refers to money tied up in the system in terms of inventory and work in progress, as well as with machinery and buildings and the like, the second is Operating Expense which is the money spent by the system on generating goal units, but not the cost of raw materials, so items such as utilities and wages. This delineation of the costs of production and services allows the processes to be viewed in terms of a number of optimization questions. Typically, firms need to ask themselves how throughput can be increased, how Investment can be reduced and how Operating Expense can be reduced. These questions in turn will affect the Net Profit, Return on Investment, Productivity and Investment.

Therefore, it can be argued that the maximization of throughput contribution is key to the maximization of all of the above key performance indicators. The firm can seek to maximize TC by optimizing a number of aspects of the production processes. There are five common steps associated with this process;

  • Identify the system constraints
  • Exploit the system constraints
  • Subordinate everything else to the decisions made
  • Elevate the system’s constraints
  • Restart the process if a constraint has been broken

In the evolution of accounting, the accounting softwires are used now a days. Although accounting softwares pave way for easy accounting works, There are more disadvantages too. Certain problems and disadvantages are worth considering if you are looking to use accounting software in your business. For example:

  • Price - the package cost, although small in relation to your other costs, is higher than a paper-based system.
  • Implementation - manual accounts are generally easier to set up and can be more flexible than computerized accounting. You will probably need some initial help setting up accounting software. Your accountant or system provider will usually charge you for this service.
  • Support- you may need to purchase yearly maintenance and support for your package.
  • Specialized needs - an accounts package will typically suit most types of business. However, specialist businesses may need to refine the package or change their processes to use accounting software successfully. See more on specialised requirements for your accounting package.

Accounting software may sometimes also have a steep learning curve, so if you are more comfortable writing up ledgers and books, keeping manual accounts may be a simpler option.

Accounting can be referred to as the systematic and comprehensive recording of a financial transaction relating to any business. Also refers to as a process of analyzing, summarizing and reporting these transactions to the tax collection agencies and oversight agencies. Accounting helps the management to be able to ascertain the financial position of the business. With all accounting activities, the final report provided helps management to know the business position so they can be able to know which direction they are ending.

Accounting is very important and needed for any business transactions. It helps in recording, classifying and finally summarizing the transactions in a business. This enables coming up with a well analyzed financial document like balance sheet, trial balance among others when accounting is done properly within the business transactions.

Accounting helps in decision making, planning, and controlling processes. It's with the help of accounting there will be documents which will be factored in carrying out these processes. Again, with these methodical documents, they help in reduction of theft and frauds. Availability of accounting in any business transactions ignites the business to run with efficiency, effectiveness and accuracy manner on all the activities undertaken. This leads to more productions since the management will make the right decision and proper planning due to the good flow of transactions in a business.

As evolution of various fields causes good and bad results, we have to make our self-proper and keep following rules and regulation. Then only the evolved accounting will be very useful and harmless to any people. We must give our attention towards the evolution of accounting. And try to give any participation in the evolution of accounting.

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