Generally, companies have accounting systems that allow them to manage their assets in an orderly manner. However, accounting systems must include a tool known as an accounting ledger, which allows a record of all the company’s financial transactions to be kept in an efficient and orderly manner. Next, we will learn more about accounting ledgers and their origins.
What is an accounting book or accounting ledger?
The accounting book or accounting ledger is a physical or digital financial tool in which all the financial transactions of a company are recorded. It is characterized by storing in an organized, summarized and detailed manner the financial data related to each transaction of the company. Among the data that can be recorded are the dates, amounts, accounts involved in the transactions, balances, among others.
History of accounting ledgers
The history of accounting ledgers dates back to 5,000 BC. It is known that the first records were made in advanced civilizations of that time, such as ancient Mesopotamia, Egypt, and Babylon. These civilizations kept accounting records inscribed on clay tablets, which allowed them to track traded goods.
First accounting ledger
The accounting ledger has evolved over the years, mainly due to the needs of its users: from ancient merchants, kingdoms, and empires, to current companies and electronic commerce.
The first known accounting ledger in history was the Codex Pisanus or Libro delle Ricordanze, which was created by merchants in the city of Pisa, Italy, in the 13th century. However, one of the most influential accounting texts is the Summa de arithmetica, geometria, proportioni et proportionalità (1494), written by Italian mathematician Luca Pacioli. This book is famous for containing the first formal description of the double-entry system, an accounting method still in use today. Pacioli is known as the “father of accounting” due to his contribution to the development and dissemination of this method.
Accounting ledger in the modern era
Nowadays, the accounting ledger is based on the same principle of recording all financial transactions in an organized and complete manner, which allows companies to make decisions based on financial statements such as the balance sheet, income statement, and cash flow statement.
The accounting ledger in the modern era still uses the double-entry accounting system developed by Luca Pacioli, where each transaction is recorded as a debit and credit in different accounts. This ensures that the following accounting equation remains balanced, its elementary formula being as follows:
Assets = Liabilities + Equity
It is important to note that, thanks to the advancement of technology, there are currently digital ledgers, which operate in accounting software, which has allowed the automation of accounting and financial processes in companies, reducing errors and providing a financial record in real-time.
Accounting Packages
An example of the development and evolution of accounting ledgers is the accounting packages for companies. For example, Pilsenga’s accounting packages allow its clients to efficiently manage their finances and be more competitive in their sector, being able to perform different functions such as tax returns, integration of payment systems, automation of accounting tasks, and asset flow control, among others.
With the right accounting package, companies can be more efficient, and productive and optimize their time, as well as improve their decision-making process, acting efficiently and immediately.
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