Back to the future or the main stages of development of accounting in history

In the previous article, I illustrated a ripe moment for changing the digraphic paradigm in accounting, which is today fundamental in all computer accounting systems. The topic is very deep. I will try to disassemble it in more detail.
The third law of dialectics asserts that "in the forward movement there is a return back, in the new the features of the old are repeated"
Sometimes, in order to understand the coming revolutionary changes, it is enough to look carefully into the past.
The tendency towards the emergence of breakthroughs can be seen in the critical accumulation of quantitative changes within one of the existing paradigms. (The second law of dialectics)
If we mentioned two of the three laws of dialectics, then we will not disregard the rest. The first law of dialectics asserts that development proceeds through the solution of mutually exclusive contradictions.
Now you can apply all three laws in consideration of the subject of accounting in business yesterday, today and possible future formats.
For the reasoning I will take three parallel and interrelated processes:
- Business
- Information Technology
- Accounting
And consider them through the mist of ages.

Business

People have always produced and sold something, provided services to each other. The beginning of the use of electricity, the internal combustion engine and other great discoveries led to a rapid change in the structure of the business and the requirements for it.
In one webinar V.P. Savchuk (partner of our project, my financial teacher. Management, author of wonderful books ) presented the change in business requirements on a timeline.

Afterwards, by analogy with the pyramid of the hierarchy of human needs, Mr. Maslov , I transformed this visualization into a pyramid of the hierarchy of business needs.

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So it seemed to me more adequate to the current moment, because business cannot only change, it is necessary to ensure all requirements are consistently from the bottom up.
Thus, we all, without unnecessary chewing, understand that lately the growth of business requirements has a tendency of geometric progression. In its own way, we can regard this as a limiting quantitative content, but this is not the case in this article.
We depict this phenomenon on the graph and go further.

Information Technology

Consider information technology in terms of storage media.
Once upon a time, people put information on stones and wooden planks. Then there were options with papyrus.
But the real breakthrough (revolution) of the technology of information carriers was the emergence of paper and printing press. This happened in the middle of the 15th century. Those. some great quality race. The size of the information repository and the complexity of operating it decreases by tens and hundreds of times.
Further, over the course of five centuries, information technology has been developing within the framework of the paper paradigm. Improved methods of making paper, which is accordingly cheaper. The ways of putting information on paper are also being improved, as well as ways of structuring information within the framework of new, exceptional (as compared to stone tiles) capabilities.
But what happens at the end of the 20th century? There is a new type of media. Let's call it a computer or computer, for simplicity. Do not even need to say that now the city library can fit in 1 square millimeter. And the possibility of entering information, storage, search, processing, etc.? It is difficult to determine the number of zeros of the order of increasing quality.
To a large extent, the jump in the quality of information technology has determined the jump in business requirements. We are talking about interconnected things.
On the chart I will highlight two global leaps in the quality of information technology:

Accounting

Of course, in this case, we consider accounting as an attempt to reflect the occurring phenomena in business in the form of numbers and other records. I like to give a definition: Accounting is a digital reflection of life. In our digital world, such a definition makes it possible to draw adequate analogies. For example, draw an analogy of photography and accounting. Accounting should reflect the state at various points in time. A photo is able to capture (record) a visible state at a time. Sometimes a balance in accounting is called a state photo. In modern accounting, a lot of conventions that only specially trained specialists know, but everything seems to a normal person to be very complicated and confusing. Conditional reflection is not a photograph, but a drawing. This is the analogy. Previously, when there was no color photo (technical limitation of photography), artists painted black and white photographs with colors (I think many will find such copies left over from grandmothers). Here is our bookkeeping - this is not an exact digital reflection of reality, but a black-and-white photograph, decorated with an expert on conventional images.
We finished with the lyrics and see how accounting technologies evolved in history.
The funny thing is that the first documentary evidence of using double entry falls into one decade with the invention of the printing press.
In general, in science it is assumed that there are three main accounting paradigms:
- Unigraphic (without using double entry)
- Digraphic (using double entry)
- Cameral (cut ... the budget , but also on clean DDS, we will not take it into account).
Who is interested here is a link to a good article on paradigms .
Double entry is the basic principle of data logging. It is very simple (fifth-grade mathematics) and is the basis for various structural systems, at the entrance of which are primary documents, and at the output are status and results reports (balance sheet and income statement expenses). Such structural systems in science are called forms of bookkeeping. Those. The form of bookkeeping (a set of definitely interrelated plates) is a kind of technical device, limited by the level of technology used (this is important because paper and methods for applying information to it are the level of information technology), within which one or another method of recording, processing and extracting data is used (I specially translate everything into the language of modern IT).
One can imagine that, prior to the invention of double entry, accounting developed, one way or another, in the framework of the unigraphic paradigm, after, respectively, in the framework of the digraphic paradigm.
Namely, in parallel with the improvement of papermaking technologies and technologies for applying information to it, various systems (accounting forms) arose that optimized accounting, but within the framework of all the same digraphic paradigm.
It's time to draw the whole schedule.


Now the complete interconnection is visible, and to what I am leading everything here.
First, the interrelation of business needs and its corresponding accounting requirements, which are developed within the limitations imposed by the level of information technology, is visible.
Secondly, it is clear that a qualitative leap in information technology generates a qualitative leap in basic accounting technology.
Finally, it is clear that a new accounting paradigm should emerge, corresponding to the new qualitative capabilities of information technology. At the same time, it becomes clear that what is called management accounting in the modern world works exclusively within the framework of the unigraphic paradigm and cannot realize such a breakthrough.
This whole article is much theorized, but in another way it will not be possible to distract attention from practical problems solved daily by accounting and automation specialists. For the most part, these problems are only a consequence or a chain of consequences of a key problem, which, in turn, lies at such a theoretical level. And if you solve a key problem, then all the problems that are a consequence will be solved. So says common sense and the theory of restrictions (TOC) Ilya Goldratt. Goldratt also claims that if during the period of validity of the restriction practical rules were formed, even if the technological limitation itself was lifted, then these rules themselves would become a restriction.
Everything that he says about the rules is very relevant to accounting, because the five-century history of development in the mode of restricting paper information technologies formed a huge number of rules and stereotypes. And, as you know, stepping on the throat of stereotypes is extremely difficult.
In conclusion, I confess that we have made this breakthrough. We had to spend several years to break stereotypes in our own heads (it’s good that there weren’t many). But now we are faced with the problem of external misunderstanding, i.e. with an even more difficult task - to destroy stereotypes in other people's heads.
I hope this article, even though it’s too theoretical, will at least make you think more carefully and impartially (on top of stereotypes and rules) to look at the technologies and methodologies we have developed.
I wish you all success and prosperity, and the ability to control your own business or yourself as a business will necessarily lead to this.
ps The text looks at the second and third laws of dialectics. What place is the first law of dialectics here, it will be possible to understand from a future article about why there is a division of financial and management accounting.