Agnes Ann Pepe is a Graduate Student of the Graduate Management Program at St. Joseph's College in Patchogue, NY.
Every accountant knows that accounting is the language of business. That language has gone through many changes throughout the ages. But through all the changes accounting technology has always played a part in making the accountant’s job just a little easier. As our knowledge of technology increased so has the accountant’s ability to analyze statistical values. Technology advancements have enhanced the accountant’s ability to interpret data efficiently and effectively. He/she now has the ability to interpret the language of business with such ease that the accountant has become a corporation’s most trusted business advisor.
Accounting Changes through the Ages
We can start way back in the beginning with the invention of the abacus, used to keep track of calculations in business. Although we didn’t call it technology, we can go back centuries with several attempts to build adding machines to help an accountant with mathematical solutions. After the first working adding machine, came the invention of the calculator for information accuracy. As technology advanced so did the speed and proficiency of the accountant’s job. But even with adding machines and calculators the accountant still had to keep track of the businesses’ functions with paper entry. The process of identifying, measuring, and communicating financial information was documented in the form of paper records, columns of numbers and hand written statements (“How Technology,” n.d.). An accountant had to be a very methodical, detail oriented person.
Towards the end of the twentieth century the accounting profession began to take on a whole new look. Computers and accounting software has changed the industry completely. With programs such as Microsoft Excel an accountant now had an electronic spreadsheet. The need for adding machines, calculators, ledgers and pencils was eliminated. The job became less tedious with less of a margin for error. The core training for accountants which included the basic accounting, auditing and tax preparation was a thing of the past. With use of the computer an accountant can now perform statistical accounting or forecasting analysis with greater efficiency. Accounting technology has eliminated the number cruncher sitting behind a desk working on people’s taxes and has allowed the accountant to find new challenges with much more to offer then decades ago when they relied on an abacus for a calculating tool (Kruglinski, 2009; “How Technology,” n.d.).
E-Business, the Intranet and the Extranet
Today’s accounting professionals who understand the importance of the Internet will use the Internet for e-business. They use the Internet to execute major business processes in the enterprise. Electronic business (e-business) allows the accounting firm to coordinate activities for internal management and combines the clients’ relationships with the use of digital networks. Enterprise applications can be used on a small internal network called the Intranet. The Intranet can distribute information to employees such as corporate policies, and programs. It centers on a portal which is a single point of access. Information can come from several different systems using a Web interface. They can feature such things as e-mail, internal documents such as the Code of Ethics, and a search tool. It is a good means of communication within an organization. Accounting professionals can also communicate outside the organization with Web technology using the creation of an Extranet. This allows the clients to have limited access, linking to a portion of the accounting firm’s Intranet to import and export files back and forth. Linking electronically increases efficiency and cuts down on travel costs ultimately reducing operational costs (Laudon, Laudon, 2006, p.59, 62,276-277).