In Anglo-Saxon England, population rents were due to the local lords, who in turn owed taxes to the king. Charters such as those in Kemble's Anglo-Saxon Charters kept extensive written records of what was owed by who. The king appointed reeves or ealdormen who, by the reign of Alfred the Great of Wessex, were expected to be functionally literate and numerate, and able to carry out the day to day bureaucratic organisation of their territories.

With the land tenure changes following the conquest of 1066, the system of taxation changes to reflect this. The Domesday Book is one of the most important documents in English medieval history, and is an incredibly extensive survey of every county in England, it's territory, ownership and the contents and values of its towns and villages, down to the number of ploughs, oxen and even beehives. The whole point of this very rigorous exercise was to calculate the exact value of tax due to the king from every corner of the country, and the duty of each shire reeve to collect it.

To add a little to what BRIStoneman says: once the government knew what you owned, the problem was then 1) for them to collect your taxes and record that you'd paid them at least once and 2) for you to have a record of paying it, so you couldn't be taxed twice. Oh, and perhaps you can't read. And parchment is expensive stuff, for writing out receipts.

The solution to this was the tally stick. It was typically a short length of hazel stick- a good soft wood that whittles easily, and sends up plenty of usable shoots from a stump. The stick was whittled or planed square , then the reeve, Exchequer clerk, etc. would carve into the stick a series of notches that signified the amount being paid. The stick was then given two side notches and split between them,creating two pieces that had a matching series of notches. One would be given to you, and one kept by the reeve- who'd likely also write your name on it. If there was a dispute, the two pieces could be reassembled and checked, to see if the notches all matched. The tally stick was split into two unequal lengths- the longer length was called the stock, and it went to the person who paid the money: the other part called the foil, or counter-stock, went to the reeve or Exchequer, who'd been paid. ( I see there's a story about this being the origin of the word "stockholder", but as my Oxford English Dictionary does not note this, while it does have the Old English equivalents for "stock" and "foil", that may not be true). Thus, there was no confusion about which direction the money had gone, either: the person with the short piece had been paid, the person with the longer piece had paid them.

With paper records being more practical, it was decided in the 18th c. to stop using tally sticks. That actually happened in 1826, and eventually it was decided to burn the old tallies, to heat Parliament.
The Exchequer of England had amassed an enormous number. The result was not only the loss of some priceless information to future historians, but the fire got out of hand and burned the medieval Palace of Westminster