Accounting and Computers
Accountants and accounting systems have been around for many years. Accountants keep track of the financial transactions and records of their individual clients or major corporations in journals and spreadsheets. These journals and spreadsheets contain various categories involving debits and credits. Their major rule is that assets must always equal the liabilities and capital or equities of their clients.
Their job can be extremely tedious and may require careful attention to detail. Accountants deal with lots of numbers; adding, subtracting, multiplying, and dividing them. A major part of the job is to keep track of these numbers and be extremely careful that everything is correct and balanced. Because their jobs involve such hard and tedious work, accountants are constantly looking for new and easier, more efficient methods of performing their tasks.
In the past, sometimes even today, accountants recorded all journal entries on paper that was about ten inches by fourteen inches. The journal paper or spreadsheets were divided into many rows and columns. This way, they could keep their numbers and all of their data aligned. They showed all the individual transactions of their clients on paper. The hardest part about it was that it was all done by hand.
In the late 1970's two men from the Harvard Business School helped to introduce the electronic age to accountants. Dan Bricklin and Bob Frankston developed a basic computer program that records accounts and journal entries for accountants. They developed a way to computerize spreadsheets that would become very helpful to business people. Their program was called VisiCalc.
Their program was made to organize and save time and effort for people doing repetitive work with numbers. Rick Hayes said that "a computer can perform calculations at speeds of millions to billions of calculations per seconds" (Hayes p. 65). Their program quickly became popular with the business society. Hayes also said that "computer technology provides a dramatic improvement in the speed and control of accounting" (Hayes p.65). Accountants became more accurate and efficient and were able to do more work with the help of computers.
The computer screen was divided into rows and columns that contained separate cells. The cells are basically the intersection of a row and a column. Numbers and labels were allowed to be entered in an individual cell. Accountants could also write and enter formulas or use built in, short-cut formulas to perform different operations with the data. The formula can be copied across individual rows and columns. The programs can also show graphs with the data that is entered. The major application that these spreadsheet programs have is that the computer does the calculations for you and they are accurate.
Another feature that these programs have is that you can format or change the way the spreadsheets look after you have already entered the data. You can change the font and font size of the numbers and labels. You have the option to show dollar signs and decimal points, underline and double underline cells, bold words, et cetera. It is possible to change the column width and the row height. The information you enter can be saved, deleted, and/or printed. Rick Hayes said that the "computer can prepare accounting statements immediately at the close of an accounting period rather than requiring several hours or days of manual work" (Hayes p. 66).
There is no single program for spreadsheets. There are many different ones. VisiCalc, SuperCalc, Lotus 1-2-3, and Excel are some of the major programs. Lotus and Excel are the most common ones that are used today. VisiCalc and SuperCalc were some of the first programs developed about twenty years ago.
In today's society, it seems that we are constantly using computers for everything. They have become more and more popular and routine. They have also become much easier to use. It is easy to learn how to use spreadsheet programs for accounting. All you have to do is follow the guidelines in manuals and tinker with the computer. By just trying different commands and buttons, practicing, and asking others for help, you can learn a lot. T.W. McRae believes that "the effort expended in learning about computers will prove to be a worthwhile investment" (McRae p. 2). Once the user gets to know different aspects and features of the programs, making and keeping accurate records on spreadsheets will become easy.
There have always been comparisons with accounting systems and computerized work. Accountants used to believe that changing the technology of accounting will screw-up the accounting system. This is not at all true. According to Hayes, "accounting is based on real-world economic events. Computers are designed around theoretical mathematical models" (Hayes p. 65). T.W. McRae states "it is possible to change the accounting technology without changing the accounting system and vice versa" (McRae p. 39).
Accounting is basically a complex system of collecting data. Using computers is probably one of the best methods to analyze and manipulate the data. With a computer, the information is updated automatically as soon as the data is entered, saving a lot of time for business people. The importance of computers "is realized when the user takes a deep interest in and gains a good understanding of the computer system which is processing the information he receives" (McRae p. 1). I believe that in the future, computers will help us provide even easier ideas and techniques with accounting.
Hayes, Rick Stephen. Simplified Accounting for the Computer Industry. New York: John Wiley & Sons, 1981.
McRae, T.W. Computers and Accounting. New York: John Wiley & Sons, 1976.