Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Accounting for Computer Scientists

martin.kleppmann.com

Post reply on HN
Print view View original

41–50 of 79 posts

Re: Accounting for Computer Scientists

#41

Post by martinkl »

duck wrote: post #26
zdw wrote: post #8

Earlier quoted context omitted.

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.

Anyone know of a good Ruby clone?

I wrote a Ruby gem for accounting stuff a while ago: https://github.com/ept/invoicing --- it's unmaintained at the moment, but it does a lot of things right, so anyone interested in taking it over would be most welcome to do so.

Re: Accounting for Computer Scientists

#42

Post by jacques_chester »

al05 wrote: post #39
jacques_chester wrote: post #24

Two observations. First, coming from computer science, introductory accounting - the bookkeeping mechanics - is quite easy. I took a 101 class and was surrounded by future Lords of The Universe who complained about how "hard" it was to add and subtract numbers according to a small system of rules. Accounting is a system of metrics. The system under measurement is your business. Its purpose is to give an accurate read…

I agree with observations and comments. Well you can live without profits for sometime, if you run out of working cash, your stuffed. This is why loans, and factoring come in and is why even profitable business require loans because of bad cashflow. One easy way to try avoid this, is to always try to get in flow payments coming in faster, and outgoings slower. Even if the net total is the same in end, it allows more…

Yep. When you're out of cash, the game is up, no matter what the P&L says.

A different way to look at it is this: cashflow tells you the health of the company right now, P&L in the long run. You need to watch both.

For example, you've booked $100 million of sales for the period. According to the P&L you're profitable by $20 million. A bill arrives from a supplier for $10 million.

But supposing you only had $5 million cash on hand. Unless those customers begin paying you money for the booked sales, you are in trouble. Time to take corrective action.

Likewise. Consider that you're in a business where customers pay on purchase (most retail industries). Your cashflow might be excellent in that you have plenty moving across your books. However costs are rising and you are making a loss on the P&L. Eventually this will deplete your cash and you will be out of business. Time to take corrective action.

Used properly, P&Ls and cashflows are a monitoring tool, a kind of standard Nagios/munin/zenoss for your business.

Re: Accounting for Computer Scientists

#43

Post by dreyfiz »

shawnee_ wrote: post #14

If you’re a real accountant reading this, please forgive my simplifications; if you spot any mistakes, please let me know. There is one pretty important section of the P&L / Balance Sheet that's missing . . . taxes. On that note, I am hosting a tax workshop on 3/15 @ Hacker Dojo in Mtn. View (very close to YC's office) http://www.transparentaccounting.org/self-employment

Please make a recording available more widely afterwards, for those of us who can't attend. I'd pay the same amount you're suggesting as an in-person donation for this, if it comes to that.

Re: Accounting for Computer Scientists

#44

Post by prodigal_erik »

bigiain wrote: post #34
cwp wrote: post #29

Earlier quoted context omitted.

No, they only loan out $90. But that is creating money. Where did that $90 come from? It didn't come out of your account; you still have $100. Imagine how pissed you'd be if you went to make a withdrawal and the bank said, "no, you can only have $10 right now, we lent the rest to somebody and they haven't paid it back yet."

The $900 figure comes from the assumption that the $90 they lend out eventually lands in somebody else's account, and they then also lend out 90% of that $90, and then recurse that all the way down till there's nothing left to lend out again: perl -e'$s = 100; while($s > 0.1){$t = $t + $s * 0.9;$s = $s * 0.9;} print $t' 899.140495544283 (edited: I have no idea why HN dropped out the asterixes in that code...)

Asterisks without whitespace (or a leading indent) mean italics: http://news.ycombinator.com/formatdoc

Re: Accounting for Computer Scientists

#45

Post by tectonic »

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...

Re: Accounting for Computer Scientists

#47

Post by johnzabroski »

Duff wrote: post #15
jcromartie wrote: post #6

Having recently taken an accounting class, this is amazing. The course I took was chock full of "because that's the way it is" explanations of terms and practices, which without fail left me feeling confused and unsatisfied. I think most people here are like me and really need deep explanations of the lower level concepts in order to be able to apply higher level concepts. Accounting coursework is absolutely horrible…

Accounting courses are horrific, but in fairness they try to get you up to speed on the basics before diving into the detail. A typical CSI 101 course is often like this -- you learn about operators, etc without understanding how things actually work until later.

I had really great accounting professors, who explained WHY things were done.

As with anything else, assume a normal distribution of teaching talent, and hope you end up being taught by somebody on the right side of the curve.

Re: Accounting for Computer Scientists

#49

Post by johnzabroski »

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 have to say, I hated the blog post, but being pointed out this plus that Reckon code somebody else posted, has made it worth reading and criticizing.

Re: Accounting for Computer Scientists

#50

Post by wisty »

al05 wrote: post #39
jacques_chester wrote: post #24

Two observations. First, coming from computer science, introductory accounting - the bookkeeping mechanics - is quite easy. I took a 101 class and was surrounded by future Lords of The Universe who complained about how "hard" it was to add and subtract numbers according to a small system of rules. Accounting is a system of metrics. The system under measurement is your business. Its purpose is to give an accurate read…

I agree with observations and comments. Well you can live without profits for sometime, if you run out of working cash, your stuffed. This is why loans, and factoring come in and is why even profitable business require loans because of bad cashflow. One easy way to try avoid this, is to always try to get in flow payments coming in faster, and outgoings slower. Even if the net total is the same in end, it allows more…

Most of the hard problems are to do with depreciation, and the legalities of how you classify them.

For example, Police departments have dogs. Dogs are assets. If all government departments are told to use accrual (rather than cashflow), they need to depreciate assets.

So the account needs to figure out how dogs depreciate. Should you assume that a dog has a useful life of 10 years, and loses 10% of its initial value every year? Or that it exponentially decays, as it gets older and less able to sniff bad guys? Or should it only be 5 years? What do you do if a dog ends up working long past its expiry date?

It can be tricky to come up with sensible numbers. Especially when accountants don't have domain knowledge, and people who do don't like speaking to them.

Post reply on HN