Double Entry Bookkeeping

It is helpful for marketers to understand accounting. The phrase double entry bookkeeping has a tendency to put people off but that is unfortunate. The idea that each event is represented by two entries is an elegant one. Marketers can learn a lot from the strengths of such an approach.

To do two entries one must have a much better understanding of what is actually going on. For instance when making a sale a single entry system would involve one of the team saying we have made a sale and adding that to the list. A double entry system requires more. Did cash come in? If not who owes us the money? Have we sent them an invoice? It is easy to see how this can be a boon in bringing discipline to record keeping.

As many will know Luca Paciloi writing in the late 15th century, codified double entry bookkeeping. This was the system being used in the burgeoning (what is now) Italian trading organizations. Pacioli’s work is much larger but it undoubtedly the proto-accounting system he laid out which has given him the greatest impact. It is pretty amazing that the approach he wrote down is still in use. “Today, we still teach double-entry bookkeeping following the principles set down by Pacioli, and all manual and computerized accounting systems owe much of their processing logic to the principles and processes he described.” (Sangster and Scataglinibelghitar, 2010, page 423).

Alan Sangster and Giovanna Scataglinibelghitar want us to think of Pacioli as more than just a writer. They argue that his treatise can tell us about him as a teacher. “..in the fifteenth and sixteenth centuries, the text of his bookkeeping treatise would have been used as a classroom dictation script…” (Sangster and Scataglinibelghitar, 2010, page 428). Many modern professors would like it if we could just read our books in class. Apparently Paciloi had a number of good ideas to make teaching double entry bookkeeping more effective. The authors blame those who followed Pacioli for making an elegant system hard to learn. Maybe they are correct, certainly there is value in their advice to teach in the context of the world for which it was created.

Read: Alan Sangster and Giovanna Scataglinibelghitar. “Luca Pacioli: the father of accounting education.” Accounting Education: an international journal 19.4 (2010): 423-438.