Monday, 23 February 2009

It ain't the same anymore

Accountants are, by nature, cautious and tradition bound. You wouldn't expect to see accounting in the forefront of change. And yet sweeping changes in accounting have happened in the 20 odd years that I have been acquainted with this profession. Here is a trip down memory lane.

When I first started working as an accountant in the early eighties, computers had still not come into common use. The more common contraption was something called a comptometer (with various clinks and bells), which anybody below the age of 40 would not have heard of. Calculators were there, but you needed a capital budget to buy one with detailed justification of cost benefit. Ledgers were manual , in loose leaf binders. Sounds prehistoric ? Read on.

Everything was manual. There was a role of a ledger keeper, whose only job was to post entries into the ledger, using double sided carbon - the proof sheet being a method to ensure that at the end of each day, at least the total of debits and total of credits matched. The ledger keeper could not go home until the proof sheet tallied.

There was no such thing as monthly or quarterly closing. Closing was only an annual activity. It was a major event - it took some 15 days to close the books of a factory or a branch and another 15 days to consolidate the accounts of all the units inside a country - god knows how long it took to add up globally. All other activity came to a halt in January - no payments, no routine transactions. The ledger keeper was a key man - he would post furiously during this period. The comptist was another key person. This was the expert on the comptometer who added up the ledger sheets. Both of them knew that this was their moment - so demands for higher wages, and threats to go on strike were usual (you could almost predict when exactly their tummies would begin to ache and when they would decide to go home in the middle of the day). Cosying up to these guys was an important part of the accountant's job. And the first time the trial balance was struck, it would not tally ! So every hand was called, to total and retotal the sheets until the trial balance tallied. I still remember the year when it stubbornly refused to tally for 3 full days and nights of non stop totalling and when it finally did, we all let out a war cry, which they say frightened all the cats and dogs in the town to run and take cover.

Closing was virtually over when the trial balance tallied - whether the numbers were all fully right and made sense was secondary ! As soon as the trial balance tallied, an army of typists would type out the trial balance in the forms that were mandated and a nice packet weighing in at 5 kg would be created. There was of course no email or internet, so somebody would be found to catch a plane, carry the accounting returns to headquarters, while everybody else left for home to sleep flat out for 24 hours.

And then would come the auditors, including one worthy who was their comptist (with his own "independent"comptometer), who would retotal all the ledger cards. Green pens would come out in their dozens for the auditors to tick - stories abound of how you could get the auditors to put their green ticks on any two sheets of paper as long as they carried the same numbers.

When you decided to qualify to becoming an accountant, you had to serve as an articled clerk (read bonded labour) in a Chartered Accounting firm. And a geriatric "senior" would start training you by making you add up each page in the telephone directory mentally for three months, to sharpen your adding skills.

All payments, were of course, made by cheques. Cheques would be typewritten by a dedicated typist using the old typewriter that made a racket.

Management accounting was the art of mastering the green sheet - for some reason, ruled sheets with columns came in green color in India in those days. The tool of choice was the pencil - sharpening 25 pencils was the first thing you did in the morning. The expert, who consolidated management reports was a sight to see - he would join together 2 or 3 desks and stick together some 10 of the dreaded green sheets to create a super sized sheet with 342 rows and 74 columns. Various underlings would then write numbers into the correct cell as he called them out. He would then run from one end of the sheet to the other, adding numbers along the way with lightning speed. His total was then the company's sales or profits or whatever else they were reporting !

It was a different world in those days. In a short span of 20 years, the accountant has changed beyond recognition. If somebody who was an accountant in the late seventies, was suddenly plucked into today's world, he would probably die of shock.

How did the boring conservative accountant change this way,. Especially as other functions have remained more or less the same (let me bait you guys) ? The sales guys still explains why he cannot sell because he does not have the right stocks. The marketing guy still can't quote a credible market share number and still makes lousy ads. The production guy still makes the product that is not needed and won't make the product that is. And the HR lady still can't get the increment letters or the payroll out in time.

Raise a glass to the super sexy accountant !!


Durga said...

It takes a lot to digest that an accountant's role was this difficult without the computer. I, for one, cannot imagine it! We are complacent with the modern facilities provided and still struggle at times with the reporting deadlines. Hats off to the old time accountant who did a fabulous job. For people of the newer accounting generation like me, who hadn't given a thought about how things would have been done 20 years ago, it is certainly something to learn from, if we happen to encounter the older generation of accountants.

Anonymous said...

Ramesh, is the true blue accountant an endangered species? I had an interesting conversation with a Global signing partner from a Big4 firm who is of the view that the best benchmarked process control environment is 75% automated IT controls and 25% manual(fact is many companies still have it the other way around) With ERP systems and middleware and what not and with month closing no longer an activity (closing? you can close any day you want!), are we looking at a new breed of Accounting savvy IT specialists. With the volume of biz data exploding, good companies tend to manage by exception rather manage every thing. I for one, (a non accountatnt who drifted into accounting by accident) have strongly believed that accouting and the aura around it was a man made myth! Cheers - Kiwibloke (not yet an Elite Allblack)

Ramesh said...

Hi Durga - it wasn't all that difficult, just a lot more manual. Adding a telephone directory isn't the most wonderful of all skills - that's partly why I didn't do a CA !!

Ramesh said...

All Blacks are elite !!

Yes there should be no aura around an accountant, but equally the other side of the pendulum, the bean counter tag, isn't right either. Accountants, I believe, must not become slaves of the ERP, but be masters of it.

VInod said...

Fantastic one Sir, amusing and at the same time a clear insight into how much things have changed in the accounting world in 2 decades. Will ask Ricky to read this :-)

Prince said...

Being a doyen of the "facit" era, the tight deadlines (not to be confused with the telephone line which conveniently went dead to save a snowed over accountant!) however made fine tunings impossible and all "shocks and surprises" had to be managed with oratorical roundabouts reminiscent of Yes Minister, which today would make equity analysts crawl into the woodwork. Good times, interesting times and relevant to a shareholder era where rumour led stock prices. Ramesh, can you recall dear "Paniwala" visiting your cabin to deliver shares and collect information-incidentally? What does surprise me is that AGMs are still held after 5 months of closure of Accounts in this electronic age !! Anyone to enlighten us on this new "dark corporate period" and the "reign of terror of the stock market" ? Do I see analysts' creeping out of the woodwork ? Does Ramesh have a scoop to share? Cheers

Ramesh said...

Thanks Vinod. Ha ha - Ricky can't posibly recognise a comptometer !!

Ramesh said...

Oh yes Prince - "Stronger than Paniwala". Don't have a scoop unfortunately - maybe the kings of the stock market of our times have their own story to tell !

Amit said...

Interesting to read this...although i do not have this old history but sound familier, as I did some book keeping for 0ld timer those days and I have worked on this in Mafatlal, even in late 80s they were using this system. And I did met one genious who came with comptometer in one of the Mafatlal mill, who was kept employed by " Mafatlal Seth" simply for this skills!!

Ramesh said...

Thanks Amit; Yes how much things have changed. I'm sure the same Seth would not look at a comptometer now.

Anonymous said...

Good to know the history. Actually, I got similar experience in many years ago when reconciled thousands of bank transtions on weekly basic. The difference is that I was lucky to have Excel. That maybe the middle of accountant life.
Thanks for the CHANGES!

Ramesh said...

Oh yes Ricky - I know what you mean. Bank Reco, even with Excel is torturous.

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