05 May First accounting software was produced with the birth of Visicalc

Did you know that it wasn’t until 1978 that the first accounting software was produced with the birth of Visicalc?  This was actually a spreadsheet software enabling accounts to be done electronically.  In the same year Peachtree Software produced a software package for the personal computer.  The sort of computer available in 1978 was a Commodore.

Everything about computing and software was very clunky with accounting packages being downloaded from a handful of floppy discs which took hours to down load – a far cry from our instant downloads in minutes today.

Accounts has been and always will be a double entry format.  In the days of manual accounts we used ledgers and had to put the information in twice hence double entry – this is all done seamlessly in the background by the computer software.  If you are unaware of what is happening you will not understand how accounts are generated and how the information is transmitted to the profit and loss and balance sheet.  What is the PNL (profit and loss) and what is the BS (balance sheet)?  PNL is the snapshot of the day to day trading of the business but the balance sheet is the health of the business.  If someone was looking to buy a company they would look at the PNL but they will make their decision based on the balance sheet.  And Yes you can be overdrawn at the bank and still make profit.  You can be lacking in money and still make profit – you can for a short term be making a loss and have money in the bank – but note this can only go on for so long before you run out of cash.  The saying is Cash is King – without cash the business will shrivel up and die.