Then
and Now – Part II
Thinking about technology and labor
saving improvements, when I first started working in public accounting around
1960, there were no copy machines. There
were also no computers, at least not in the sense that we think of computers
today. What we did have were two early
versions of equipment that were used to accomplish similar tasks.
Copy
Machines
For
copy work, there was something called a Bruning
machine: a small tabletop piece of equipment that employed a wet process, sort
of like a blueprint machine. We made a
master of the document we wanted to copy, say a tax return, on velum, which was
a kind of stiff, clear sheet of plastic, and wrote on them with something like
a marking pen. The velum master was
mounted on the machine and a sheet of light-sensitive paper was run under it
and through a developing solution. After
the paper dried, we had a copy you could use for the tax return and for file
copies. It doesn’t take a lot of imagination to appreciate how slow the Bruning process was and how much time it took to make
multiple copies and assemble them.
When Xerox machines first appeared on the
market, they could only be leased. After
a few years, the government forced the company to offer their machines for sale
in addition to leasing them. However,
the early machines cost around $25,000, so it’s easy to understand that not
very many small businesses bought one.
Think about the price at that time, the
’60s - $25,000 for a Xerox machine that was about the size of today’s tabletop
copier, compared to maybe $150 now for equipment that’s not only a copier, but
also a fax machine and printer as well.
And, how much labor is saved today by the abundance of low-cost copy
machines that are available? It’s
incalculable.
Furthermore, because of the miracle of
digital technology, today we are rapidly moving into “paperless” processing and
storage of information on computers, which will save countless more labor hours
and physical space, cutting costs even more.
Computers
I can also offer a first-hand look at
how computers have impacted the accounting profession.
Most people know that early computers
were gigantic machines, with systems that filled an entire room, sometimes even
an entire floor of office space. Today, the average desktop PC has more power
and capacity than those early systems.
The first IBM System/360 computers occupied approximately 11,000 square
feet of space and had only about one-quarter the memory of today’s desktop PC. Think about that. Eleven thousand square feet of space filled
with equipment that had only one-fourth the memory that the average desktop PC
has today.
Punch cards were the first method of
running the early computers. To operate
the equipment, small rectangular holes were punched in cards that were about 4 inches
by 8 inches in size. The position of the
holes was read by the machine as either letters of the alphabet or numbers. Hundreds, sometimes thousands of cards were
required to process even a relatively simple set of accounting records.
Eventually, some courageous business
types bought or leased their own machines from IBM and established service
bureaus. These took raw data from clients
and had keypunch operators produce the cards, which were then run through their
IBM machines to create the accounting records their customers needed.
Improved technology subsequently
enabled the IBM machines to process data using a roll of tape that had holes punched
in it. The computers read the tapes to
create the punch cards without keypunch operators. That cut costs for the service bureaus and
made it possible for them to process information much faster.
This technological advance introduced a
new piece of equipment, logically called a punched tape machine,
that was made by different companies.
My partner and I bought one from National Cash Register (NCR). It had a large keyboard with both the letters
of the alphabet and numbers. And, as I
remember, there were some other special keys for certain symbols, such as the
dollar sign, plus or minus signs, etc.
We bought one, so we could punch our own data on tapes ourselves, which
cut our costs, gave us greater control and shortened the turnaround time. We thought we were in “hog heaven.”
The first machine we bought took a lot
of thought and planning. The $5,000 cost
was a lot of money in those days, roughly equivalent to $31,000 in today’s
dollars. Compare that with the cost of modern
computers and the difference in the power of the two systems, then and now.
But the impact of computers on the
accounting profession goes far beyond bookkeeping and data processing. Software advances, such as Microsoft’s Excel
program, make it possible to create extremely complex analytical worksheets and
financial projections that once took weeks to prepare in a matter of hours or a
few days. The effect of this on both
the profession and consumers is impossible to quantify.
Adding
Machines and Calculators
Adding machines cost as much as $600 in
the 1960s. They were big clunkers, made
of steel, but they were great machines and very durable. However, they were also quite limited. Compare that with the price of a printing
calculator at Costco or your local drug or office supply store today.
Think about the comparison: $600 in
1960s dollars versus $20 to $60 or $80 today.
The current equipment has perhaps hundreds of times the power of those
old adding machines – at less than five percent of the cost.
Typewriters
Another interesting comparison is
typewriters. About 40 years ago, the best electric typewriter on the market was
the
The
Internet
And, we can hardly consider the subject
of technology without at least a comment about the Internet. Just about everyone is now part of the “world
of the wired,” including yours truly. It
has completely revolutionized communications, saving time and money to an
extent that’s impossible to measure. E-mail
has become so ubiquitous that it has replaced regular “snail mail” for most
communications, even signed documents.
It’s also the preferred method for most inter-office communications,
often saving immeasurable amounts of time and travel for meetings.
One recent commentary pointed out that
the information available on the Internet is more than 25,000 times greater
than the content of the world’s biggest library. Actually, that seems like an underestimate to
me.
Obviously, I could go on about this
indefinitely, talking about fax machines, cell phones, teleconferencing, television
and countless other technological advances, but I’m sure you get the point that
we should all be grateful for the many benefits that technology makes possible
today. All too often we tend to take
things for granted, especially modern technology. But, that’s just my opinion.
© 2007 Harris
R. Sherline, All Rights Reserved