Accounting Solutions

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The stereotype:

Accountants sometimes get a bad reputation, this definition from "Evil Edna" on www.UrbanDictionary.com wouldn't inspire the next generation of accountants:

"An extremely dull person, devoid of all personality. Stereotypically will wear a grey suit, drive a grey car and have grey skin. All accountants are balding by 25 years of age and have repulsive coffee breath. Spending a day in an accountants can bring on depression in an instant."

Not great after all the hard work to qualify as an accountant! What is going on?

The history:

Lets look back in time and see how we got here.

 Per Wikipedia: Fra Luca Bartolomeo de Pacioli   was an Italian mathematician, Franciscan friar, collaborator with Leonardo da Vinci, and an early contributor to the field now known as accounting. He is referred to as the father of accounting and bookkeeping and he was the first person to publish a work on the double-entry system of book-keeping on the continent.

Ok that's looking a long way back but much like da Vinci's Mona Lisa and engineering inventions, the fundamental principles of accounting have stood the test of time and are still applied in modern ERP systems today. These principles establish a logical way to ensure financial transactions are recorded, reconciled and reported on in a logical and consistent manner.

Having to manually write out transactions in this double entry format in books called journals and then summarising them in books called ledgers could easily give anyone a dull outlook on life and contributed to the reputation!

Accounting today:

Today accountants still use those fundamental principles but these have evolved into various standards of accounting with the most prominent being IFRS (International Financial Reporting Standards - www.IFRS.org).  The standards consist of principles to address the accounting for the wide variety of industries and types of transactions that occur today and accountants now focus on how to apply these principles rather than worry whether debits will balance to credits. So hopefully this variety contributes to us being less dull, although keeping up with all the different accounting principles as they evolve could lead to the repulsive coffee breath!

The end result of having a strong finance function in your business is knowing that all funds  and assets are accurately accounted for, you have access to reliable financial information for decision making and the business can comply with statutory requirements in submitting annual financial statements.