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Habilitation: 4th
March 2003 |
Franz-Josef Arlinghaus Art.: Bookkeeping, Double-entry Bookkeeping, |
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Art. Bookkeeping: .rtf-Format /.pdf-Format During the Middle Ages, Italian bookkeeping
may be regarded as the leader in all Europe regarding its technique. Even
though we may assume that merchants had already kept account books at earlier
times, the oldest remaining fragment of such an account book date from the
year 1211. The debtors’ and creditors’ accounts of a Bolognese
client of a Florentine bank, which are stated therein, were written out in volgare. During the second half of the
13th century, we can already see an increase in the surviving records, but
only around the year 1300 not only parts but also complete account books
remain for us to review (namely the books of the Fini, Farolfi, Peruzzi,
Bardi and Del Bene). Then, starting from the 1360s, we have the account books
of Francesco Datini of Prato, which include many auxiliary and sub-books
(until 1410 almost a total of 600 books). Without them, an analysis of the
accounting systems is always very strongly based on presumptions. Most of the remaining account books
from the period before 1350 were written by Tuscan merchants. The first
remaining one from Milan dates to the second half of the 14th century (the
Bank of del Maino, the Marco Serrainerio Company). Although these books are
written in Latin, they show a structure regarding bookkeeping and accounting
which is almost identical with that of the Tuscan account books written in
the vernacular. Only in the 15th century do we find evidence of account books
from other Italian regions (for example, the account book of the Venetian
Gicomo Badoer, 1436-39). The entries of the accounts
consisted mostly of one ore several full sentences, which were skillfully
made up on a page split into three columns. An entry started with the name of
the debtor or creditor, the first letter of his name was sited in the left
column. After the expression dee dare
(shall give) or dee avere (shall
have), a statement of disposition followed the reason for the entry with a
short description of the business transaction, which often contained an exact
description of the trade goods. In older account books this was completed
with the names of witnesses or guarantors who were present during the
business transactions. Here the sentence was made up in such a way that the
quantity of the traded goods - as well as the first letter of the
client’s name - could be written in the left column. At the end of the
sentence/entry, the amount was noted so that it could be placed easily in the
right column. Even though the Italian merchants
calculated with Arabic numerals as early as the 13th century, Roman figures
dominated in their account books until the late 15th century (but with
decreasing frequency). The number of traded goods (placed in the left column)
and the noted amount in the right column were written in Roman numerals
exclusively. The page numbering, date and notes, often appearing as
intermediate or sub-sums, were increasingly written in Arabic numerals. The
prolonged use of the ’old’ writing style is mostly explained by
with the general belief of the contemporaries that the Roman were
forgery-proof. For a long time, debits and
credits were not placed one next to the other, especially in notebooks, but
rather on top of each other (so-called sezione
sovraaposto entry). If a debt had been paid, it was written down below
the debit-entry/entries. The entry was written as a whole sentence similar to
the one described above; instead of dee
dare and dee avere, it said ha dato (has given), ha avuto (have gotten) or abbiamo dato (we have given). During
the 14th century, the account books were divided as a whole into one debit
part in the front and one credit part at the back. Only towards the end of
the century was the direct line-up of debit and credit established in
Tuscany; perhaps this had already been practiced for somewhat longer in
Venice. In the beginning, both the left and right of the two open sheets of
the accountant’s ledger was used (noted as bookking alla veneziana); then the paper itself
was divided into two parts by a line. Merchants kept different books for
various areas of business. Therefore, the libro
di entrata e uscita (book of income and expenditures) represented a
cash-book, whereas in the libro di
balle mandate (book of the bales dispatched), large quantities of goods
traded over wide distances were noted. In the libro secreto (the secret book), the income and profits of the
socii as well as agreements made by management up to elaborate business
contracts were recorded. The ledger,
in which the debtors and creditors were recorded, is called the libro grande (Datini), mastro, campione, libro
dell’asse, libro dei debitori
e creditori (Medici) or - in Arezzo - libro
reale. The great amount of
information to be recorded required the use of several successive account
books of the same type. In the beginning, they were only differentiated by
terms such as libro nuovo (for the
book most recently used) and vecchio
(for the book already completed), but then the signing of the account books
with single letters and/or colored bindings was rather quickly established
(therefore, for example, a* ledger of the Datini is called libro grande o giallo, segnato A
(large or yellow book, with ’A’ signed). It is important that the books can
be classified not only according to their type of business or date order; it
is also taken into consideration if they contain entries, which may be noted
as the first note for a transaction or if the lots are based on entries that
were previously written down in other account books. As it is shown in the
early account books of Datini from the 1360s and 1370s, a rough draft -
called ricordanze - was used even
prior to the introduction of double-entry accounting, in which all business
events were noted purely chronologically. The entries of the debtors and the
creditors in the ricordanze were
then copied in the memoriale, a
book which had been divided into a front section for debits and back section
for credits. Here, various entries for a particular person could be
summarized. In order to condense information further, the entries of the memoriale were copied out again in the
ledger. In large companies only we find
merchants whose main task was keeping the account books. On the other hand,
it had been customary for a number of employees to make entries into the
different account ledgers during a more or less continuous period. Quite
often there is evidence for more than one hand on one page of an account
book. In schools, calculation with Arabic numerals was taught, while the
young merchant studied accounting during his ’education’ in the
shops (botteghe) of his company. It
seems that only during the first half of the 15th century
’bookkeeping’ was taught by teachers or in schools. Nonetheless a
relatively homogenous kind of bookkeeping was established due to the tight
contracts of the traders among themselves. Merchants from Genoa or Milan
could ask their business partners in Tuscany via a letter to enter
expenditures for purchased goods on their account into the books of the
Tuscan traders and vice versa. Probably right from the beginning,
commercial bookkeeping had to fulfill several functions at the same time.
Here again we have to mention the motive of legal security - towards the
client as well as towards the socii
and the associates. Therefore, in the year 1211, besides guarantors witnesses
are named who could confirm business transactions, if necessary. After the
bankruptcy of the Peruzzi in 1343, their books were examined by a communal
committee. Due to the growing acceptance of commercial activity in general
and more specifically the wider regularity of noting the proceedings, during
the second half of the 14th century account books had increasing validity as
evidence in legal courts. Baldus of the Ubaldi grants the ledgers (named by
him codex rationum) almost the
evidential value of a notarial document. About 1400 Francesco Datini sends
for the account books of his branch in Avignon because he plans to use them
in a legal dispute at the Court of the Guild. On the other hand, merchants
generally did not - as Pacioli proposed in 1494 - submit their accounts to
guild committees or municipal offices for authentication: and further we find
notes (called ricordanza) in the
books which point out that someone prepared a legal document regarding one or
another business transaction. In addition, control over the
employees must be mentioned. Especially the design of cash and spese di casa books had to be carried
out in such a way that made it hard for the simple employee to embezzle
money. If the balance of cash and cash income corresponded, one could assume
proper management. On the other hand, it must be stated that the cash books
were not always kept with the necessary continuity. In researching the subject, it had
been assumed for a long time that bookkeeping in the Middle Ages served
mainly to maintain exact and quick balances of business transactions, as it
is the case today. (This is in fact a third function.) The further
development of bookkeeping is therefore interpreted as a result of the early
capitalistic mentality of Italian merchants and their rational yearning for
profit. The method of double-entry bookkeeping, in which every event must be
entered twice, once as a credit and once as a debit, and in which they
together formed with at least five different account types a closed system,
was particularly considered a sensible manifestation of this way of thinking
(for definitions see R. de Roover, Aux origines, p. 270 ff). The German
sociologist, Werner Sombart, during the 1920s, was one of the first to hold
the opinion that the capitalistic profit-oriented way of thinking, the
abstract concept of enterprise isolated from the concrete person of the
merchant, and the method of double-entry bookkeeping, are inextricably linked
together. Italian researchers (F. Melis) in particular subscribed to this and
tried to prove this method as early as possible using account books of which
nothing else than fragments remained. The first generally accepted
evidence for the application of double-entry bookkeeping derives from the
communal account books of the City of Genoa in the year 1340; it is here
stated, though, that the books had been kept ad modum banchi so that an older use of the method among private
merchants may be assumed. But only during the 1380s did this method grow in
popularity among Italian merchants. The earliest evidence of a journal, not a
necessary but a rather important auxiliary book within the system of
double-entry bookkeeping, in which the entries are formulated for assignment
of the amounts to the specific accounts, dates form the 1390s. In 1383 Datini
changes the bookkeeping of almost all Fondaci to the new system; but even at
the end of the 14th century it had been introduced by the Bank of del Maino in
Milan for a short period only. Contrary to former beliefs, a
first description of double-entry bookkeeping is not only to be found in 1494
in a chapter of the ’Summa’ by the monk Luca Pacioli, but rather
in 1458 in Il libro dell’arte di
mercatura by the merchant Benedetto Cotrugli. The explanations in the
’Summa’ are more extensive, however, and they were spread quickly
since they were already printed, whereas Cotrugli’s writings were not
printed before the mids of the 16th century. The relatively slow spread of the
method and its rather late use in tractates and research papers already point
to the fact that the people of the 14th century probably regarded the
advantage of the use of double-entry bookkeeping as less important than it
had been assumed by research for a long time. B. S. Yamey pointed out that
due to the rather inconsequential manner in which the method had been used by
merchants in the Middle Ages, double-entry bookkeeping could hardly be seen
as a suitable instrument for gain and loss determination. Even most balance
sheets of the Medici during the 15th century did not balance, and efforts to
find the mistakes and to correct them could not be found. Therefore, the
importance of double-entry bookkeeping in particular and, generally, the function
of bookkeeping for the determination of business successes within the
business world of medieval merchants must be seen in relative terms. Aside from the functions of
’legal security’, ’employee control’ and
determination of business success the memory function is usually named as a
basic and very old motive for the establishment of account books. Also the
practice of selling goods on credit - contrary to German merchants - made it
necessary to note debtors and also creditors (suppliers). This explains why
personal expenditures of this kind have been recorded so early and
frequently. In the second half of the 14th century, these accounts, kept as
memory aids, still seem to form the core of bookkeeping. For this purpose
exclusively the first company whose accounts were recorded almost completely
- a company under the head of Francesco Datini and Toro di Berto, founded in
Avignon 1367 - had noted within a period of less than six years for several
hundred clients more than 10,000 lots. Such an amount of information needs
further revising since it can hardly be structured in an orderly manner ad hoc if one wishes to insure that
the layout of the entries is clear and that no entry could inadvertently be
overlooked. The necessary revision of entries written for the purpose of
memory was the main motive for the above-mentioned copying of the entries
from the ricordanze in the memoriale and in the end, in the
ledger. The inevitable restructure of the material in this context can be
drawn mainly from the need to establish a usable base of information in view
of the large quantities of notes by copying the entries in a new account
book. First steps towards elaborate bookkeeping may be a result of the
function as memory aid and of the necessity for a revision. In any case, for
some time the running of the accounts of debtors and creditors was the
function of bookkeeping which was kept most consistently - understandably so
since a forgotten entry of a debtor most certainly meant a loss of money for
the company, whereas a cash book, not kept in good order, meant the loss of
money only when dealing with dishonest employees. It must be pointed out that many
connections may be drawn between the account books and the so-called libri di famiglia, in which merchants
noted ’private’ events. Beginning with the writing style used
(the so-called mercantesca, which
developed in the course of the 14th century from the notary italics) up to
the names of books (ricordanze, libro segreto are found as names for
both types of texts) and entry structure (listing of birth, marriage and
death are frequently noted in the same way as entries of an account in
’paragraph form’), numerous structural parallels may be found,
and find their roots probably in the intensive use of account books by the
merchants. In addition, ’personal notes’ may be found in business
books and large sections of libri di famiglia quite naturally contained
commercial transactions. Editions: Nuovi Testi Fiorentini del Dugento, con introduzione,
trattazione linguistica e glossario, a
cura di Arrigo Castellani (Autori classici e documenti di lingua pubblicati
dall’accademia della crusca) 2 tomi, Firenze: Sansoni (1952). Contains among others fragments of account
ledgers up to 1300. Castellani, Arrigo: La prosa italiana delle origini, I: Testi
toscani di caratere pratico, vol. 1: Trascrizioni;
vol. 2: Facsimili, Bologna: Pàtron
Editore (1982). Herein - aside from other
documents - fragments of the earliest Italian account ledgers until 1275. Melis, Federigo, Documenti
per la storia economica dei secoli XIII- XVI. Con una nota di Paleografia
Commerciale a cura di Elena Cecchi, Firenze: Leo S. Olschki (1972).
Sapori, Armando, I libri di commercio
dei Peruzzi, (Pubblicazioni della direzione degli <<Studi
Medievali>> 1), Milano: Fratelli Treves Editori (1934). For Malan:
Zerbi, Tommaso, Il mastro a partita
doppia di un’azienda mercantile del trecento, Como: Cavalleri
(1936). Pacioli, Luca, Exposition of Double Entry Bookkeeping,
Venice 1494, English translation by Antonia von Gebsattel, Introduction by Basil Selig Yamey,
Venice: Albrizzi Editore (1994). Critical Studies: Melis, Federigo, Storia della
ragioneria. Contributo alla conoscenza e interpretazione delle fonti più
significative della storia economica, Bologna (1950); Melis, Federigo,
Aspetti della vita economica medievale (Studi nell’archivio Datini di
Prato I.), Siena: Leo S. Olschki (1962). Both books contain numerous examples of accounts. For double entry bookkeeping: Sombart, Werner, Der
moderne Kapitalismus, Bd. 2, Munich (1924), S. 110fff. de Roover, Raymond,
Aux origines d’une technique intellectuelle: la formation et
l’expansion de la comptabilité à partie double, in: Annales
d’histoire économique et sociale 9 (1937), S. 171-193 and S. 270- 297
(Definition S. 270ff.). de
Roover, Raymond, The Development of Accounting prior to Luca Pacioli
according to the Account Books of Medieval Merchants, in: Studies in the
History af Accounting, ed. by Ananius Charles Littleton and Basil Selig
Yamey, London: Sweet & Maxwell (1956), S. 114-174, reprinted in: de
Roover, Raymond, Business, Banking, and Economic Thought in Late Medieval and
Early Modern Europe, ed. by Julius Kirshner, Chicago: University of Chicago
Press (1974), S. 119-180. Yamey, Basil Selig, Accounting and the Rise of Capitalism:
Further Notes on a Theme by Sombart, in: Journal of Accounting Research 2
(1964), S. 117-136, reprinted in, Yamey, Basil Selig, Essays on the Histrory
of Accounting, New York: Arno Press (1978). Yamey, Basil Selig, Notes on
Double-Entry Bookkeeping and Economic Progress, in: Journal of European
Economic History, 4 (1975), 717-723, reprinted in: Yamey, Basil Selig, Essays
(op. cit.). Yamey, Basil Selig, Benedetto Contrugli on Book-Keeping (1458),
in: Accounting, Business and Financial History 4,1 (1994), S. 43-49. For
memory as an impetus for bookkeeping: Arlinghaus, Franz-Josef, Zwischen
Notiz und Bilanz. Zur Eigendynamik des Schriftgebrauchs in der
kaufmännischen Buchführung am Beispiel der Datini/di Berto-Handelsgesellschaft
in Avignon (1367-1373), (Gesellschaft, Kultur und Schrift - Mediävistische
Beiträge 8) Frankfurt/Main: Peter Lang (2000) (Abstract in English). For scrittura mercantesca see: Miglio, Luisa,
L’altra metà della scrittura: scrivere il volgare (all’origine
delle corsive mercantili), in: Scrittura e civiltà, 10 (1986), S. 83-114. An excellent overview give Chatfield, Michael,
Vangermeersch, Richard (Ed.), The History of Accounting. An International
Encyclopedia, New York, London: Garland (1996). |
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