Thinking of the Balance Sheet as a Wallet

Non-bookkeepers tend to focus on income and expenses and ignore the Balance Sheet accounts (assets, liabilities, and equity). This can lead to all sorts of problems, like overdrawn bank accounts, unpaid bills, duplicated transactions, understated income, understated expenses, and more.

I find that it can be helpful to think of your Balance Sheet accounts as different pockets within the same wallet. This video walks you through the concept.


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The Utopia of Rules

Last week, I wrote about David Graeber’s The Utopia of Rules: On Technology, Stupidity, and the Secret Joys of Bureaucracy in the context of Fortnite Battle Royale.

There, Graeber’s most salient observations had to do with the similarities between fantasy role-playing games and accounting, the role of comics in socializing future leaders, and the tension between the fun of rules-based games and that of anarchic play.

That’s certainly an idiosyncratic list of topics to find in a book that is ostensibly about bureaucracy, and still it doesn’t begin to show the extent of the ground that Graeber covers.

It’s a testament to the fact that bureaucracy—the use of impersonal rules and procedures to regulate public life—is so deeply embedded in our lives that I have a hard time thinking of a society that gives a sharp enough counterexample the make it concisely clear what Graeber means by “total bureaucratization.” Continue reading “The Utopia of Rules”

Getting the Future Wrong: Xerox’s Hardware Solution to Software Problems

In 1965, Xerox made a 14-minute-long video ad for the Xerox 2400 photocopier, and I’ve been tickled by it ever since I first saw it years ago. Not only does the ad, titled “What’s the Difference?” illustrate how many steps the Xerox 2400 can eliminate from the process of short-run duplication,

The Xerox 2400 reduces the steps in the short-run duplication process from seven to two.

it also notes that since xerography is a dry process, as the name suggests, it keeps printers’ and office workers’ hands clean.

No more stained fingers, no more smudged documents.

Even better, with just a handful of simple techniques,

Just use overlays to add, delete, and substitute.

the Xerox 2400 not only duplicates documents but also facilitates the creation of new ones. The video devotes a good three minutes to demonstrating how this will revolutionize the sales order and invoicing system, the purchase order system, and production order system.

The ad closes by noting that the Xerox 2400 is so easy to use that not just women, but even children can do it.

In her book, Marriage, a History: From Obedience to Intimacy, or How Love Conquered Marriage, Stephanie Coontz conveys the contemporary appeal of such advertisements, which seem so strange to us today. Continue reading “Getting the Future Wrong: Xerox’s Hardware Solution to Software Problems”

Taking Payroll Literally

The word payroll first appears in the English language around 1765, according to Webster’s. While I’m pretty sure the “roll” part comes from the concept of “roll call” or “muster roll” (which probably itself came from such things being recorded on rolled-up scrolls), I like the way this Dey Time Register time clock at the San Francisco Cable Car Museum brings the word full circle.

Employee Time Clock ca. 1900. The device is rather straight forward, even though it looks intimidating. The main difference to today’s time clocks is that, rather than having individual time cards for each employee, all times were recorded together on a roll of paper inside the clock. Each employee had a number, located on one of the buttons on the front of the clock. By moving the arm to the number location and pressing the arm into the hole next to the number, the print head inside the clock would stamp the time and the employee number on the (pay-) roll. (Apologies to Paulie and Jessamin for sharing their appropriately delighted reflections.)

Continue reading “Taking Payroll Literally”

Translated Accounting

Last week, I took an accounting test at a firm where I’d applied for a few positions. English is the primary language for the particular position I’m a candidate for, and since this is Québec, it was only a small surprise that the test was written in French. I blithely told my contact that this was no problem.

My French has never gotten much better than “comme une vache espagnole,” hence the featured image for this post (giggles and thanks to zipfslaw1). So I hit up our friend Google Translate. Our quirky friend Google Translate.

Actually, Google, I had French in mind… (“bilan” means balance sheet in French)

In the end, it was fine. Better than fine, even. The six questions were fairly straightforward: creating financial reports from a list of accounts and their balances; creating a bank reconciliation report from two different listings of transactions; writing off bad debt and booking reimbursements that included taxes that had to be treated in specific ways; and recording a paycheck and its withholdings. Just in a different language from the one I learned the techniques in, but numbers are numbers and techniques are techniques, right? Continue reading “Translated Accounting”

The Basics of the Balance Sheet

Last week I laid out some of the basics of good Profit & Loss design. This week, the Balance Sheet, the P&L’s more obscure sibling. There’s a lot to delve into on a Balance Sheet, so this is just an introduction.

The Balance Sheet is less intuitive and more technical than the Profit & Loss, and it is the place where people are most likely to want or need the services of a professional.

Basics of Good Profit & Loss Report Design

Some of my favorite projects involve creating or overhauling a Chart of Accounts so that a client’s financial reports are easier to read. Here is a quick presentation of the principles of good design for the Profit & Loss accounts, and some examples of common pitfalls. Does your P&L look like one of the bad examples? I can help!

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Extreme Accounting Avoidance

After we updated and reviewed our household finances for August, my partner sent me this:

And yes, we track our household finances in a spreadsheet–the cobbler’s child very much has no shoes.

Though now that we’ve moved to Canada–a move that brought multiple new bank, investment, and credit accounts as well as a second currency–I’m going to have to make the switch to an actual accounting platform.

Illustration of an analog numeric typewriter, superimposed on a paper chart of printed numbers.

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Denise Schmandt-Besserat and the Accounting Origins of Writing

If literacy is not a divine gift from Thoth, the baboon-faced god of knowledge, then just where did it come from?A rectangular clay table marked with cuneiform.Cuneiform tablet from the Kirkor Minassian collection of the Library of Congress. 2041-2040 BC.

You may already know that cuneiform, which was used from the fourth millennium BC through the second century AD in the Near East, is one of the world’s earliest forms of writing. Did you know that it evolved from one of the world’s oldest accounting systems–counting tokens used in trade?A collection of small clay discs, cones, and pyramids on a piece of red feltTokens from Jarmo, Iraq, 6500 BC. Courtesy Denise Schmandt–Besserat.

If you find the connection between the two hard to see, you’re not alone. It took more than fifty years between the first discovery of cuneiform tablets in the ruins of Uruk (which was also full of counting tokens) for someone to work out that the first impressions of accounts in clay had been made by pressing the counters themselves into the material. The characteristic cuneiform stylus came later.Three small clay discs and three small clay cones with a larger, imprinted clay ball Envelope from Susa, Iran, ca. 3300 BC. Courtesy Denise Schmandt–Besserat. The lenticular disks each stand for a flock, and the cones represent small measures of grain.

Denise Schmandt-Besserat is the French-American archaeologist, professor emerita of Art and Middle Eastern Studies at my alma mater, the University of Texas, who made the connection. I can’t think of a better person to feature here as I fly off to Mississippi to volunteer with the National Forest Service’s Passport in Time archaeology program for a couple of weeks.Denise Schmandt-Besserat, a light-skinned person in black clothing with their head covered, stands in front of a wall holding a wooden perch on which a hooded raptor sits.Denise Schmandt-Besserat with a falcon in Ryadh, Saudi Arabia, 2011.

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