![]() The point is, bookkeeping was an extremely laborious and risky process without computers. If one of the papers ever had to be referenced, someone had to dig through physical records to look it up, assuming it had been filed correctly. People had to do all the calculations themselves, and you can be sure that the occasional disastrous mistake did happen. Until a few decades ago, every bookkeeping system was kept with pen and paper and shoved into a file cabinet. The role of a professional bookkeeper was finally born.ġ998 was the year it all changed for the second time. The general public soon caught on that hiring a certified bookkeeper who knew a lot about best bookkeeping practices and business theory was way more efficient than trying to do it themselves. They actually introduced students to the formal theories developed centuries earlier by mathematicians like Pacioli, and they offered certifications for mastery of the systems. A popular bookkeeping manual from 1835 even comments on this, saying that “You may be an excellent businessman, and no bookkeeper at all or, an accomplished bookkeeper and possess few requisites indispensable in the character of a merchant.”ĭuring the mid to late 1800s, though, bookkeeping system classes that taught business skills and more complex bookkeeping techniques came into vogue. The reason it was called that was that they would periodically transfer their own transactions to a more permanent log that was kept at home and then “waste” the used journal pages by throwing them out.Įveryone not wearing a crown was expected to be their own bookkeeper, even if they were not great with business or numbers. They did so by carrying a “waste book,” a journal where they kept track of their daily gains and losses. An organizational change that probably seems obvious today, but it was revolutionary for the bookkeeping system back then.Īt that time, court scribes kept track of some royalty transactions, and most normal people kept track of money themselves. That means people were no longer just keeping track of “John paid Bill $1” they were creating two separate entries for “John, -$1” and “Bill, +$1” in both John’s and Bill’s ledgers. In double-entry bookkeeping, every transaction must produce two entries in different logs: one entry for money gained (credit) and another for money lost (debit). Possibly the single most important idea in Pacioli’s book was double entry bookkeeping, although the concept was initially introduced by Benedetto Cotrugli a few years earlier. ![]() It actually laid out a comprehensive system for bookkeeping in great detail, including how to interface between journals, ledgers, and other documents. It’s not a very arresting read what with all the great books on bookkeeping available today, but back then, it was a master class in how to keep track of finances. But in 1494, an Italian mathematician named Frater Luca Pacioli changed the game by publishing “Everything About Arithmetic, Geometry, and Proportion.” Until the end of the 15th century, the recording of transactions was not done in an organized way. But once people realized they could collect a lot of one good and trade it for all the goods and services they needed, they began to require logs and ledgers detailing inventories and where they went. It used to be that people would only produce what they needed for themselves and maybe a little extra for friends and family. People also started trading a lot more goods at a time. More complex economies emerged, most notably with the advent of currency around 600 BC. The stone tablets detail transactions that are surprisingly complicated considering the time period, from estate bequeathments to marriage dowries to loan terms.Īs time marched on, the writing on the tablets became more complex. That was when bookkeeping, the job of recording transactions began. Did you know that people were already recording data on tablets back in 4000 BC? That’s right, the oldest recorded contracts between two parties were found etched into stone tablets that date back that far and were found in Babylon and Assyria.
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