The word invoice may have its origins in the sixteenth century deriving from the French word envoy. but you can bet your bottom dollar that the concept of invoicing goes back to the dawn of civilisation.

Imagine, if you will, the first cave dwellers, who, having given up their hunter-gatherer lifestyle in search of a more settled existence, decide to send the best hunters out to hunt while the best furriers do their thing back in the cave. While there would have been no form of recorded invoicing, it's not hard to imagine that each person kept track of who had done what and whose pelts were whose.

Simple, effective and direct, that kind of society and that kind of invoicing was easy to administer. The accountants would have been a long time coming.

At least, that's the theory. In fact forms of invoicing started taking place in Jericho some 10,000 years ago, while there are traces of records being kept in Sumeria in 3000BC as rulers' wealth and the taxes they collected were marked down by scribes. All the great ancient civilisations, Lydians, Phoenicians, the Trojans and the Greeks had forms of exchange and systems of alphabets, often developed as a result of the need to keep track of business transactions and it's likely that not much of what was owed to the ruling classes was missed off their accounting systems.

The great Roman Empire, with its tentacles spread across the world, and the trade routes built as a result, would have had to include some forms of invoicing. The Vindolanda Tablets, found in Northumberland in 1975, are an amazing surviving record of day-to-day life and trading dating back to the first and early second centuries AD. The tablets, made of wood and written on in ink, were bound by leather thongs and were used as letters, records and as invoices. They are on show at the British Museum and last year were voted as the nation's top treasure by experts on a special edition of BBC Two's "Meet the Ancestors" programme.

In another form of invoicing, before paper records, tally sticks were used between traders. Marks were cut into wooden rods, or tallies, which were then split in two lengthways along the notching. One trader took one side, the other took the other side and when paying up the due amount they matched up their sticks. Since both sides should have matched perfectly there was no question of cheating or tampering with the system, hence our verb to tally. The Vikings and the Romans both used tally sticks (Roman numerals actually evolved out of the method of notching them). So effective were they that the British Government was still using tallies to record taxes until they were abolished in 1826. Cutting notches on the tallies was called scoring, from a Norse word, Scora, meaning to make an incision. From about 1400AD it was also the word for a record or an amount Ð the total number of score marks on the tally. Settling a score meant settling one's bill with a tradesman or innkeeper.

Meanwhile, in Italy, a more sophisticated form of accounting and invoicing was being recorded. Bearing in mind that most of the literate people in Europe were monks it is no surprise that the first man to write about the subject on paper was Franciscan monk Luca Pacioli. A highly intellectual man, who collaborated with Leonardo da Vinci on several projects, he wrote a book putting forward the rules considered best practice amongst traders in Italy, especially Florence and Venice, where he was based at the time. It's generally acknowledged that the subject had not changed over 500 years, and no-one can claim he invented accountancy, but his work "Summa De Arithmetica, Geometria Proportioni et Proportionalita" (Everything About Arithmetic, Geometry And Proportion) was the definitive guide of its time to mathematical knowledge and book-keeping. There were 36 chapters on the subject alone, entitled "De Computis et Scripturis" (Of Reckonings and Writings) which were added to give the Duke of Urbino's subjects complete instructions in the conduct of business and to "give the trader without delay information as to his assets and liabilities." So complete was the publication that it was followed for 400 years.

But if Pacioli's publication was driven by the renaissance then modern accountancy was driven by the industrial revolution. Innovation and invention brought changes in society and changed civilisation, and accountancy had to be adapted to help the new businesses set up as a result survive. Continuing success required accounting expertise and invoicing to help keep cash flowing as larger and more ambitious projects sought ever-bigger investment and dealt with expanding and more complex markets. Rows of clerks in Charles Dickens' day were kept scribing accounts and invoices to keep up with the transactions. Then the market collapse of 1929 and the subsequent Great Depression in the United States highlighted some of the failings of these age-old systems and governments globally introduced greater regulation to try to curb some of the less-than-scrupulous practices that had sprung up as a result of greed within capitalism.

This leads us neatly to the dilemmas facing accountants and traders today. Just as the Italian renaissance and the industrial revolution concentrated thought on accounting and invoicing techniques, so modern technology such as e-billing, driven by the information revolution, is shaping the future. As capital markets become more complex and global, operating 24 hours a day on a planet that never sleeps, so information needs to be transmitted instantaneously across the globe. The advent of e-billing over the last five years has enabled organisations to process and manage their billing data from a single point. The UK has some of the least burdensome invoicing rules within the European Union, but variations in Value Added Tax invoicing rules across different countries has, at times, caused a barrier to trade. January 2004's EU Invoicing Directive aims to create a pan-European convergence on the rules, with legal recognition of electronic invoicing across all member states, thus encouraging its use. The reality is confusion, with reports giving the impression that either all businesses must accept e-billing or else electronic invoicing is illegal within the EU. The reality is that neither is true. Provided HM Customs and Excise has been informed that you intend to use electronic invoicing within your business and certain safeguards have been followed to ensure the authenticity of bills that come in that way it is still perfectly legal to use the most up-to-date technology to invoices out to up-to-date customers.

Luca Pacioli would be proud, the cavemen - baffled.