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Accounting for Computer Scientists

martin.kleppmann.com

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Re: Accounting for Computer Scientists

#71

Post by narcissus »

tectonic wrote: post #45
tc wrote: post #4

"User-friendly" accounting software (such as QuickBooks) tends to obscure the fundamental simplicity of double-entry accounting. If you want to actually understand your books, use something simple and powerful like John Wiegley's ledger: https://github.com/jwiegley/ledger/

If you use Ledger, check out my command-line version of Mint for Ledger called Reckon. http://blog.andrewcantino.com/post/1503439483/command-line-a...

By coincidence, did you know that the company that distributes Quicken / QuickBooks in Australia is called Reckon?

Re: Accounting for Computer Scientists

#73

Post by nazgulnarsil »

archgoon wrote: post #12

Interesting. One of the side effects of having the zero sum rule for all transactions means that graphs can be superimposed on each other and also get a valid balance-sheet graph. Cool! Are loops possible? What do they mean?

Banks do not loan deposits. And yes, wikipedia is wrong. Ask a bank accountant.

Re: Accounting for Computer Scientists

#74

Post by Vivtek »

drindox wrote: post #62
Vivtek wrote: post #32

Earlier quoted context omitted.

I think the rules may differ in Europe (the way things are classified) - but the insight I had was that something that seems clearly to be an asset to my naive view (sales) can actually be a sort of accounting fiction to make the balances come up right, and thus be shown as a liability. Without checking my notes on a specific translation I did about 15 months ago, I don't even remember if it was sales or not. (I have…

I think the rules may differ in Europe (the way things are classified) Nope. Sales is NOT a liability, and there is no accounting fiction. Sales are also not an asset. They are an income. The money earned from the sale is the asset. I think you may be confusing ledger credits with liabilities. All credits are not increases in liabilities, but all increases in liabilities are credits. Good background on Wikipedia: [ h…

Ah - finally I found the balance sheets I was thinking of (some Deutsche Bank stuff from 2009). Turns out I was misremembering; it was equity capital that falls under liabilities, which is counterintuitive to me. Capital is, after all, something I have - but I suppose since it's an investment, it represents something I owe.

And I see capital is shown in the balance sheet in the original post as well - but what struck me as counterintuitive in the original post is representing sales as, effectively, a cash flow towards the customers. If not a fiction, surely you have to grant it's an abstraction.

Re: Accounting for Computer Scientists

#75

Post by abalashov »

tc wrote: post #4

"User-friendly" accounting software (such as QuickBooks) tends to obscure the fundamental simplicity of double-entry accounting. If you want to actually understand your books, use something simple and powerful like John Wiegley's ledger: https://github.com/jwiegley/ledger/

We've been extremely happy with SQL Ledger - http://www.sql-ledger.com/

It's open-source and it's PostgreSQL-backed, so it's easy to automate various bookkeeping phenomena by attaching triggers to SQL Ledger table changes that propagate elsewhere, or vice versa. Its interface is very web 1.0-ish, and in virtue of that, very fast and responsive.

It's definitely rather low-level in the sense that it's easy to shoot yourself in the foot with it. It's like programming in C instead of C# or Java. It requires understanding double-entry accounting and GAAP at a fairly erudite fundamental level, because unlike QuickBooks, there are no glossy splash screens or inline thought balloons to teach you Accounting 101. It's also lacking in many high-level features such as a payroll module, and has fairly rudimentary stubs for many others. It is, however, quite good at managing parts, assembles and inventory if tangible goods are your thing. It's a little more problematic for a service company; outside of AR and AP, I tend to think of it as little more than just a general ledger. That may not be giving it enough credit, though; it does have quite a lot of features.

Nevertheless, it is a great tool for a startup comfortable with using home-grown open-source solutions.

Re: Accounting for Computer Scientists

#76

Post by drindox »

Vivtek wrote: post #74
drindox wrote: post #62

Earlier quoted context omitted.

I think the rules may differ in Europe (the way things are classified) Nope. Sales is NOT a liability, and there is no accounting fiction. Sales are also not an asset. They are an income. The money earned from the sale is the asset. I think you may be confusing ledger credits with liabilities. All credits are not increases in liabilities, but all increases in liabilities are credits. Good background on Wikipedia: [ h…

Ah - finally I found the balance sheets I was thinking of (some Deutsche Bank stuff from 2009). Turns out I was misremembering; it was equity capital that falls under liabilities, which is counterintuitive to me. Capital is, after all, something I have - but I suppose since it's an investment, it represents something I owe. And I see capital is shown in the balance sheet in the original post as well - but what struck…

Equity is on the same side of the balance sheet as liabilities because of the accounting equation: Assets = Capital + Liabilities.

See this tutorial as well: http://www.principlesofaccounting.com/chapter%201.htm

Re: Accounting for Computer Scientists

#79

Post by speleding »

zdw wrote: post #8
tc wrote: post #4

"User-friendly" accounting software (such as QuickBooks) tends to obscure the fundamental simplicity of double-entry accounting. If you want to actually understand your books, use something simple and powerful like John Wiegley's ledger: https://github.com/jwiegley/ledger/

I wish I could vote this up twice. Ledger is awesome and strips away all the crap that gets in the way of actually seeing the data. There are also haskell and python implementations out there if that's more up your hacking alley.

Thanks zdw! Your comment made me try out ledger and I'm loving it after a day or two. Everything else I tried before seemed to eventually "get in the way" of how I'd like to do things.

Only downside is that the documentation is a bit lacking for version 3.0. I'm going to be using this for my business in parallel with what I have and I'll switch over if I continue to like it. There is probably a business case here for turning this into a commercial product with more importing / reporting.

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