Accounting records found in Mesopotamia (modern-day Kuwait and Iraq) date back more than 7,000 years. Emperor Augustus (63 BC – 14 AD) had access to detailed financial information that was used to aid planning and decision-making in building and running the Roman Empire
It was not until the 13th century that double-entry bookkeeping was created. The word “debit” means “he owes” and “credit” means “he trusts” in Latin.
The formalization of the accounting profession (Chartered Accountant) originated in Scotland in the mid-19th century and developed rapidly through the Industrial Revolution, with London becoming the industrial center of the world. Accounting became the backbone of business.
The method of capturing these financial transactions has used many different methods over the millenniums, but it was the invention of paper in China in around 100BC that delivered the first readily available and inexpensive material to record it on. It took a further 1,500 years for industrialized paper making to reach Europe and the first UK paper-making mill was built by John Tate in 1490 in Stevenage, Hertfordshire.
Cheap and readily available paper changed everything; it introduced the invoice and the ledger.
It is a reasonable argument that modern-day accounting has been with us since around 1500 AD, reflecting the invention of double-entry bookkeeping and affordable paper. The paper invoice has been the primary “source document” for 600 years and formally recognized as such around 1850 by Chartered Accountants.
During 1950 – 1980, accounting underwent a revolution. We witnessed the early computerized accounting solutions used by large corporates which enabled far more complex and sophisticated financial analysis, but it was the advent of an affordable PC in the early 1980’s that delivered the beginning of universal adoption. Today, almost every business uses accounting software and almost every one of those can generate a PDF invoice and email it, rather than print the invoice on paper and post it.
The only thing that has not changed significantly in over 600 years is the absolute reliance on a paper invoices to start every accounting process. Until now.
Over the past 2 years, it has become universally acceptable to send invoices via email as a PDF. Adoption rates of this methodology have already grown to over 70% of all invoices, in part because it savings us all over £1 for each invoice sent and in part by the “Green” benefits of this approach. In the next 12 months, the adoption of PDF invoices is likely to grow to between 85% and 95%.
But today, paper invoices are still with most of us, as almost every organization’s first step is to print out the PDF invoice to start the accounting process. More work and more cost for no benefit at all.
The biggest revolution for 600 years in the purchasing/accounts payable department is taking place right now. It is the removal of all of the paper and the automation of the capture, processing, approval, posting and filing of those invoices and all of the time and cost associated with it.
The commercial benefits are so compelling that it is reasonable to assume that almost all paper invoices will be gone within just a few years.
Accounts payable staff will rejoice as they currently spend up to 70% spend their lives pushing around paper and filing it. They will be freed from a boring, tedious and unproductive task to undertake far more interesting and productive work, realizing their true value to their organization. These new activities benefit them as individuals (through the new skills they learn) as well as the businesses they work for.
Let’s face it, paper invoices are a thing of the past. The accounts payable automation revolution is now.
But what will Accounts Payable look like beyond the ‘now’? Click the banner below for more on how AP can be brought into the future.