Enterprise Resource Planning (ERP)

Accounting is mathematics. Most simple mathematics one could think. The most frequent operation is the addition: revenues and expenses are added separately, the difference results in the profit. Just because this seems so easy, there is little indication in the technical literature, what really are the mathematical requirements of an accounting system.

Furthermore, there are different booking styles found in practice, that differ mainly in the way data is recorded. In Europe, it is common to register on the booking line not only an account and an amount, but also a contra-account. In the United States however, the simple booking line with just an account and an amount is widespread used. In some cases, the booking lines are associated to a common contra-account (e.g. receivables clearing account), what gives a mixed style positioned between the two main data entry modes.

We would like to call the first variant „double sided booking“ or „DSB“, the second variant „single sided booking“ or „SSB“). sqlFinance accepts both ways of data entry. It is even possible, to use both booking styles within the same mandate. Thus, in a first period you can continue with the “double sided booking” style, and then step by step get acquainted with the advantages of the “single sided booking” style.

”Double entry bookkeeping“ or „double entry accounting“) has its roots in the Middle Ages. At this time, all data was registered manually on paper. It is evident that the availability of information technology and especially the use of relational databases has opened other possibilities for an efficient accounting system.

In order to meet the requirements of the regulators and the clients often insecure in this regard many software suppliers have integrated the old habits in their applications. However, if you want to use more the potential of today’s information technology for your accounting, it is necessary to consider the mathematical requirements of an accounting system and review the traditional way of bookkeeping. A serious evaluation shows that there are several solutions available, each one with advantages and disadvantages and their practical implications.
 
Thus, it seems worth wile to consider the historical development of „double entry bookkeeping“ and the evolution of mathematical requirements for accounting systems.