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Are Accounting Journals Still Relevant?

When I first started out in accounting, which I can say was last millennium, the basics of accounting that we learned was the double-entry system of accounting. Everything had to balance and journals were the normal accounting process. Technology has changed (and change is the only constant in life) and now there are sophisticated accounting packages that do all the interface with a push of buttons that once was done by journals. 

At a recent accounting meeting, there was the next generation of accountants debating the relevance of journals, to the point where they believed that they are no longer relevant as the computer software programs (like Xero) now do all of this for you.

Technology is a tool and should never be used to replace the fundamentals. Not knowing the basic journal entries is like asking your builder to build a house with no understanding of how to read a plan. You would hope that the builder used more modern technologies than just a simple hammer and saw, but you also trust that they know how to erect walls, trusses, know where supporting beams go, and understand what a nog is. The same goes for your accountant – understanding how the numbers interact and what the effect is of an underlying transaction is the foundation of the double-entry system invented by the Venetian’s in the 15th Century.

The tools I learned in the last millennium are still the basic principles that govern the accounting profession of this millennium. To ignore them is to do so at your peril.



 

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