As soon as money began to change hands, and taxes were imposed, somebody had to count the beans to make certain there was profit.
Turnover is grand, but if income fails to exceed expenditure, disaster will result. Identifying who is doing what with the money belonging to a business is vital, how else can owners assess their actual income and any leakage of money from the business?
It is said that the Indian Chanakya produced the first manuscript in a form of a financial record as early as 323–185 B.C!
Accountancy can be traced back as far as Mesopotamia, Egypt and Babylonia - Augustus Caesar and the Roman Government made use of a form of accountancy to record financial details and to summarise money in and money out.
The Father of Modern Accountancy and bookkeeping, Fr Luca Pacoli (1447–1517), was the first person on record to have produced a written work that is essentially a thesis on double entry bookkeeping, and accountancy was thereby introduced into Europe by him.
Double entry bookkeeping is the method of entering two columns on one page; one for income and the other for expenditure so that a clear picture is available to the bookkeeper of what a business is doing, and from which a profit and loss account plus balance sheet is easily obtained.
Double entry bookkeeping is the bedrock of modern accountancy allowing business people a snap shot of their business’ performance at any time. It also enables businesses to keep a check on how much tax may be payable to HMRC.
Accountancy began to take on its present form during the nineteenth Century. The modern, formal accounting profession emerged in Scotland in 1854 when Queen Victoria granted a royal charter to the Institute of Accountants in Glasgow, creating the profession of chartered accountant (CA).
To this day the longest standing societies of public accountants are found in Scotland. England and Wales caught up a little later when in 1880 the Institute of Accountancy in England and Wales was formed.
There is no doubt as to the contemporary need for professional accountancy. The picture in 21st Century England and Wales is very significant.
Any business that trades in our high streets is subject to the Law of the Land, Income taxes, Corporation Tax, and Value Added Tax all need to ‘accounted’ for to which purpose accurate, and prompt recording is essential.
Some would say, more important is ‘what have I sold, what has it cost me, and after tax, what is left to pay my wages and repay my investment’?
A professional Accountant will produce this data from raw figures dispassionately and accurately. The professional will provide the business owner and the tax authorities with the bare facts and a good deal more. Only then can a business owner truly understand what is happening in the business.
TaxAssist Accountants Windsor, Ascot and Maidenhead may not be as old as 323 BC, but they do have lots of experience so if you need an accountant - give them a call!
