History of Bookkeeping

The American Heritage College dictionary defines bookkeeping as "the practice or profession of recording the accounts and transactions of a business." Bookkeeping systems are used by businesses and nonprofit organizations, homeowners, churches and schools. Colleges and universities offer doctorate degree programs in the field of bookkeeping (often referred to as accounting). In written form, the history of bookkeeping dates back to 4000 B.C.

In nonwritten form, the act of bookkeeping dates back to the dawn of civilization when humans used tokens to track the trade of livestock and other transactions. As far back as 8000 B.C. in Jericho, a historic West Bank city, crude forms of bookkeeping developed by tracking the accounts of properties owned by kings. As time progressed and trading systems evolved, merchant and other trading industries fueled the desire for more complex record keeping.

According to a New York Times article titled "New Light Shed Upon Ancient Bookkeeping; Clay Tablets, Used for Contracts, Discovered In Assyria -- Relics of Centuries Ago Dug Up in Asian Explorations," archeological findings have unearthed contract tablets found in Babylon and Assyria. These clay tablets date back to 4000 B.C. The tablets recorded business and communal contracts such as borrowing and lending, wills, lawsuits and marriage dowries.

It wasn't until 1494 that the bookkeeping system similar to the system used today was described in great detail. On November 10, 1494, Frater Luca Pacioli published what is generally recognized as the first complete text on bookkeeping. The book was titled "Everything About Arithmetic, Geometry and Proportion." This text describes in detail the standard accounting system used today. In the book, Pacioli painstakingly noted the use of various bookkeeping tools including journals and ledgers. He is widely known as the father of modern bookkeeping.

Frater Luca Pacioli was born in 1445 in Tuscany, Italy. He was a mathematician. He was a friend of the great artist Leonardo da Vinci. At age 37, Frater Luca Pacioli became a Franciscan friar and traveled the country teaching and expounding on mathematics. He did not earn his doctorate degree until 1486, but by that time, he had accomplished a great deal of work in the field of mathematics. He lived until 1517.

Prior to Pacioli's text, Benedetto Cotrugli wrote "Of Trading and the Perfect Trader." Cotrugli is credited with inventing the double entry bookkeeping process, although it was Pacioli who is often credited with codifying and writing the book on the accounting process. With double entry bookkeeping, all transactions are recorded in a minimum of two accounts. In addition, each transaction has two columns. One benefit of using the double entry is that it allows for more accurate record keeping in large organizations. Today, there are entire organizations that devote themselves to providing double entry accounting services.