An Organisation for all
Accountants in Practice

The side nearest the window?

Laurence Vogel of Informanagement

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Double entry bookkeeping was first devised by Muslim civilisations circa AD 624. The first fully documented European ledgers are those of a Florentine merchant at the end of the 13th century.


The process has been in use for some time!

Left hand columns are the preserve of the “debits” and right hand columns the preserve of the “credits”.

Thirty years ago, professional firm trainees would be familiar with the reconciliation of hand written records. They would know how to reconcile a bank account, prepare sales and purchase ledger control accounts, and post these and other controls to a four-column (hand written) trial balance.

Not so today.

Trainees may have a cursory appreciation of these matters, but it is unlikely that firms will have the time to let them explore the joys of extracting balances from hand-written sales ledgers – if, indeed, such things still exist.

Software incorporates double entry bookkeeping, but it cloaks the process. Operators will not necessarily realise that when they post a purchase invoice, the cost of materials and VAT accounts are debited and the suppliers account credited. Is this a bad thing?

As long as the technology works, balancing accounts will rely on programming rather than the flexing of grey matter.

And, of course, there is the matter of accuracy. Trial balances always balance when created by pressure on the return button or the click of a mouse. But do the figures mean anything? We seem to have lost something in the drive for efficiency, in automating double entry. Gone are the certainties evidenced by that perfect balance of a control account: to the penny. In its place is the race to drive down processing time, be more efficient. The price, loss of understanding; of appreciation of the bricks and mortar that make up the numbers.

These days the debit side is not the side nearest to the window, it is ghost of its former self, an often times excluded heading at the top of a trial balance print out.