Double-entry Bookkeeping

50 Things That Made the Modern Economy

BBC

Business

4.8 • 2.6K Ratings

🗓️ 9 September 2017

⏱️ 9 minutes

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Summary

Luca Pacioli was a renaissance man – he was a conjuror, a master of chess, a lover of puzzles, a Franciscan Friar, and a professor of mathematics. But today he’s celebrated as the most famous accountant who ever lived, the father of double-entry bookkeeping. Before the Venetian style of bookkeeping caught on, accounts were rather basic. An early medieval merchant was little more than a travelling salesman. He had no need to keep accounts – he could simply check whether his purse was full or empty. But as the commercial enterprises of the Italian city states grew larger, more complex and more dependent on financial instruments such as loans and currency trades, the need for a more careful reckoning became painfully clear. In 1494 Pacioli wrote the definitive book on double-entry bookkeeping. It’s regarded by many as the most influential work in the history of capitalism. And as the industrial revolution unfolded, the ideas that Pacioli had set out came to be viewed as an essential part of business life; the system used across the world today is essentially the one that Pacioli described. Producer: Ben Crighton Editors: Richard Knight and Richard Vadon (Image: Handwritten accounting ledger, Credit: Suntezza/Shutterstock)

Transcript

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0:00.0	50 Things That Made The Modern Economy With Tim Harford
0:15.2	In 1495, or thereabouts, Leonardo da Vinci himself, the geniuses genius, noted down a list
0:22.4	of things to do in one of his famous notebooks.
0:26.1	Da Vinci's To-Do lists written in mirror writing and interspersed with sketches are magnificent.
0:33.2	Find the Master of Hydraulics and get him to tell you how to repair a lock, canal and
0:39.1	mill in the Lombard manner.
0:43.0	Ask the Florentine merchant Benedetto Portinari by what means they go on ice in flunders
0:50.0	and the deceptively brief draw Milan.
0:55.1	This list included the entry, Learn multiplication from the root, from Maestro Luca.
1:02.8	Leonardo was a big fan of Maestro Luca, better known today as Luca Paccioli.
1:08.4	Paccioli was appropriately enough a Renaissance man, educated for a life in commerce, he was
1:14.0	also a conjurer, a master of chess, a lover of puzzles, a Franciscan friar and a professor
1:20.4	of mathematics.
1:22.2	Today, Luca Paccioli is celebrated as the most famous accountant who ever lived.
1:29.2	Paccioli is often called the Father of Double Entry Bookkeeping, but he didn't invent it.
1:38.2	The double entry system, known in the day as Bookkeeping Alavaneziana in the Venetian
1:43.4	style, was being used two centuries earlier, around 1300.
1:49.2	The Venetians had abandoned, as in practical, the Roman system of writing numbers, and
1:54.5	were instead embracing Arabic numerals.
1:58.2	They may also have taken the idea of double entry bookkeeping from the Islamic world, or
2:03.0	even from India, where there are tantalising hints that double entry bookkeeping techniques
2:08.0	date back thousands of years.
	...

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