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The world of bookkeeping is vast, intricate, and deeply tied to the history and evolution of trade and business. My team of expert startup bookkeepers follows in a long tradition of helping businesses record their transactions, manage their finances and successfully grow. Here are some of the most fascinating bookkeeping facts that shed light on this crucial, yet often overlooked aspect of business operations.
Ancient Origins: Bookkeeping can be traced back to ancient civilizations, making it one of the oldest professions in history. Archaeologists have found evidence of bookkeeping on clay tablets from ancient Mesopotamia dating back to around 3300-3200 BC.
The Birth of Double-Entry Bookkeeping: The first known manual on double-entry bookkeeping was written by Italian mathematician and Franciscan friar Luca Pacioli in 1494. Dubbed as the “Father of Accounting and Bookkeeping,” Pacioli didn’t invent the system but popularized it through his book “Summa de Arithmetica, Geometria, Proportioni et Proportionalita.” That means “Everything About Arithmetic, Geometry and Proportions.”
The Jargon: Many bookkeeping terms we use today, such as “debit” and “credit,” come from Latin. Debit comes from “debitum,” which means “what is due,” while credit comes from “creditum,” which signifies “something entrusted to another.”
First Female Accountant: In the late 19th century, the field of accounting and bookkeeping began to open up to women. The first female certified public accountant in the U.S. was Christine Ross, who passed the CPA exam - in the top three of all of the candidates who sat for the exam in 1899. Kruze is proud to be founded by a woman, and to have a very high percent of our team members be female as well. If you are an experienced accountant, visit our remote accounting jobs careers page - we are fully remote.
Impact of Technology: The first bookkeeping machine, the Burroughs Registering Accountant, was invented in the late 19th century- all it did was addition. But in an era that is pre-computer, pre-calculator, that’s pretty helpful! In the more era, technological advancements have significantly reshaped the bookkeeping landscape with the introduction of accounting software like QuickBooks, Xero, and Sage, which simplify and automate bookkeeping tasks. And even more modern, the best expense management tools automate a huge amount of manual bookkeeping tasks.
Size of the Industry: The accounting services industry, which includes bookkeeping, tax preparation, and payroll services, is vast. According to IBIS World, as of 2023, the industry was worth around $585.3bn in 2023, worldwide.
Crucial for Startups: Accurate bookkeeping is crucial for business success. According to a U.S. Bank study, 82% of small businesses fail due to poor understanding and management of cash flow, which underscores the importance of effective bookkeeping. We don’t see that being the same issue that our clients, VC-backed startups, have. Perhaps because our clients work with us because they are more focused on their financial hygiene!
Bookkeeping Errors Can be Costly: Inaccurate bookkeeping can lead to severe penalties. For instance, in the U.S., the Internal Revenue Service (IRS) can penalize startups for incorrect tax filings, which often stem from bookkeeping errors.
Bookkeeping vs Accounting: Although they are often used interchangeably, bookkeeping and accounting are not the same. Bookkeeping involves the day-to-day task of recording financial transactions, including purchases, receipts, sales, and payments, while accounting is more analytical and strategic, involving the interpretation, classification, analysis, reporting, and summarization of financial data. At Kruze, we pride ourselves on offering financial advice that helps founders navigate VC fund raising, M&A due diligence, board meetings and more.
Bookkeeper vs CPA: While virtually anyone can claim to be a bookkeeper as there are no strict educational or professional requirements, becoming a Certified Public Accountant (CPA) is a different story. CPAs must meet stringent educational and experience prerequisites, pass a rigorous examination, and adhere to a strict professional code of conduct, making their expertise in accounting and financial management particularly special and reliable. We believe that we are the best CPA for startups!
As the financial backbone of every business, bookkeeping continues to evolve with the changing times and technological advancements. Bookkeeping facts can be really interesting - and fun!
Remember, if you’re a startup founder, accurate and consistent bookkeeping can save you not only time and money but can also offer you critical insights into your business’s financial health, helping you make informed decisions for sustained growth.
Although a definitive database of CPAs exclusively serving startups doesn’t exist, it’s highly likely that Kruze holds the top position as the largest CPA firm fully committed to aiding funded startups. Our firm brings comprehensive expertise in Accounting, Tax, Finance, Bookkeeping, and HR to more than 800 funded startups. Impressively, our clients collectively managed to secure over $4 billion in venture capital and seed funding just last year! We know what it takes to run a VC-backed startups books. That’s a fact!
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