Here’s a fun (okay, that might be going too far for some) exercise for increasing your “medieval experience” at events where you know you’ll be spending money, whether that be Market at Birka, Gulf Wars, Pennsic, GWW, GNEW, or even (get ready to clutch your pearls) the Renaissance Festival.

Introductory Information

Would My Persona Have Done This?

The practice of keeping financial account records goes back a long, long time, though the further back in time you go, the more difficult it may be for you to learn. Prior to the introduction of Hindu-Arabic numerals, financial records were kept using Roman numerals, which cannot easily be summed on paper - an abacus (or other calculation tool) would be used to make the calculations and the resulting amount would be written into the records. Very time-consuming. You’re welcome to do further research and adapt this tutorial to your persona’s time and place. This tutorial will stick to later-period practices.

Who Do We Blame for This?

In the late 15th century, Fra Luca Pacioli, a mathematician with merchanting experience wrote an educational document on the topic of mathematics titled Summa de arithmetica, geometria, proportioni et proportionalita. In this work, he included a section instructing wholesale merchants (and those who aspire to being a wholesale merchant) how to keep their records and what records they should keep. This document ended up being one of the earliest to appear in print (via movable type), and has been not only re-printed under other titles, but also translated into other languages.

The methods practiced by 15th century Venetian merchants likely came to Venice from Eastern cultures with whom the Venetian merchants traded.

On Reading the Original Text or a Translation

The original text is written using a mix of vernacular 15th century Florentine and Venetian Italian. It uses words that today have different meanings from what they meant at the time. Translations are available in English, German, French, Spanish, Russian, and naturally, modern Italian. However, as many of those doing the translation work have cautioned, translating a 500+ year old work into modern language is a delicate task and some translators have chosen to rephrase or use more modern terms in place of literal translation. If you first read Lost in translation: Pacioli’s de computis et scripturis (the source of the information in this paragraph) before you dive into a translation, you will be, perhaps, a bit better equipped to recognize that what you are reading may not fully convey what Fra Luca intended. The good news is that you are not a 15th century Venetian wholesale merchant, and this is merely an immersion exercise.

This tutorial is designed so that you don’t have to read Particularis de computis et scripturis if you don’t want to.

But isn’t this..?

..just modern bookkeeping? Mostly yes. Keep reading, though, because - when was the last time you did any kind of bookkeeping on paper?

If you have any experience at all with modern bookkeeping, as you continue to read you will notice that everything is incredibly familiar. This is because the system that is described in de computis has not changed very much since then. Some later authors of bookkeeping manuals have even been accused of plagiarism (as has Fra Luca, for that matter) because of how similar the later texts are to de computis. If you’re already well-versed in modern double-entry bookkeeping, you’re ahead of the class, and all of this will be pretty easy. However, it should be acknowledged that not everyone receives the same quality of secondary education and many (many) schools fail to teach basic personal finance concepts. This tutorial attempts to provide sufficient guidance to those whose experience with personal finance is minimal or completely nonexistent (and may I point out, if that describes you - it’s not your fault, and it’s not a moral failing).

The Parts of A Complete System of Records

A complete system of records is more than just the gigantic ledger book you see in movies. Don’t panic: we’re not going to actually do a complete system of records in this exercise.

This section is mainly informational, and goes into detail about all of the parts of a system of records as Fra Luca writes that it should be done.

In some places in this section, the word book appears in double quotes. This is because traditionally these records would physically be kept in separate bound books, but they do not have to be, especially for this exercise. So in this tutorial, book could mean “section of a book”, or it could mean “a separate book”. That is up to you. In some places, “books” (plural) will refer to the entire collection of financial records, or perhaps to only those records which are “open”.

The Inventory

The inventory is a complete listing of everything the merchant possesses. The manual instructs that you should begin with valuable, easily pilferable items such as physical currency, precious metals and stones, furs and leathers, fabric, clothing, household linens, furniture, animals, and other equipment. Then continue on to real estate, money in bank accounts, and money people owe you.

Fra Luca instructs that an Inventory document should be kept in a safe location, away from prying eyes.

Exercise: if your persona made/kept a household or merchant inventory, what would it include?

The Memorandum

This is the first place daily transaction entries are recorded. It is expected that the entries may not be entirely tidy. This is also where the most detail should be recorded, and entries that are placed in this “book” should be made as soon as possible after each transaction is made. These entries may be written in plain language, ie “[date]: Paid $5 to Etienne’s Chapeaux for two ostrich plumes, dyed red.” If you purchased multiple items in one transaction and would like to itemize, you’ll just write a more detailed entry. If you’d like to track sales tax you should note that information as well. If you are given a paper reciept or invoice, you can tuck it into the back of your book to use in subsequent steps.

Of all of the possible record “books” you may keep for this exercise, this is the one you should definitely carry with you, along with a writing tool.

In setting up your Memorandum, you may number the pages so you can reference them in the next step. You might also like to leave a small amount of space at the end where you can write a reference to the corresponding page in the Journal (thus indicating that the transaction has been recorded).

The Journal

This “book” is a tidier version of the Memorandum. You will periodically transfer transaction records from the Memorandum into the Journal in a more tabular format. Each entry will eventually include a reference to the matching entries in the Ledger, and may optionally also include a reference to the page in the Memorandum where the transaction is recorded. In this book you will begin to see double entry bookkeeping in action, as each transaction will have values input that should balance to zero when summed.

The Ledger

This is the big one. This is a record of accounts. Everything is an account: your actual bank accounts, your revolving credit (credit card) accounts, loans you’ve taken out, money you’ve loaned to friends or family, physical property, cash, merchants with whom you do business, the street performer you tipped, and yes, the organization responsible for running the event.

Nearly everything that goes into the Ledger comes from the Journal. For each transaction in the Journal, you will usually make two entries in the Ledger: one in the originating account and one in the destination account. Because you aren’t a 15th century merchant, how you record the accounts you don’t control (where the spending money goes) is up to you. If you want to keep track of how much money you spend at each merchant, then each merchant should have its own account section in your Ledger. If you just want to track categories of spending (food, furniture, clothing, accessories, misc), each category will be an account. If you’re tracking sales tax, that will have its own account as well.

The Supporting Documentation

This has traditionally referred to correspondence written on paper and sent by courier, aka “snail mail”. Mundanely, we tend to conduct a lot of correspondence by email, which automagically records the metadata (date, author, recipient, etc) of each piece of correspondence and can sort it all in a chronological order for you.

In the 15th century, you had to do all of that by hand. Include the date and your location in any letter you write. Keep a copy of all correspondence you send. Mark the exterior of your outgoing correspondence with something that indicates that it is important business correspondence. Keep a physical archive of everything in chronological order.

In de computis, Fra Luca also instructs merchants to retain all receipts and invoices as supporting documentation. Mundanely, if you make a purchase using any electronic means (card, PayPal, phone wallet, etc), those transactions are recorded for you, and unless you plan to use a personal cash expense as a tax deduction, you may not really need to keep the paper receipt.

Setting Up Your Books

Deciding on a Physical Format

This step may need some experimentation. A good system is one that makes doing the right thing (keeping good records) easy. That is going to be slightly different from person to person.

Here are a few possibilities:

• One A5 journal divided into three sections (Memorandum, Journal, Ledger)
• One A5 journal divided into two sections (Journal & Ledger) plus an A6 journal or cahier (Memorandum)
• Three separate books, with the Memorandum possibly in the smaller A6 size, and the ledger possibly in the larger A4 size, as needed
• Loose paper for the Journal and Ledger, and a pocket notebook for the Memorandum
• Skip the Memorandum altogether and go straight to the Journal if you like. Just understand that if you wish to do the Journal properly, it will require you to pause for longer after each purchase to record the transaction.

You may wish to keep a straight-edge tool with your Journal & Ledger books to help you add nice straight lines where necessary.

If you’re using an A5 or smaller size bound book, using a full spread of two facing pages for your Journal entries may be easier than using a single page spread. In that case, each two-page spread will be numbered as a single page.

A Financial Scenario

In order to present some examples, we need a financial scenario.

Let’s say that I am going to a weekend event and I am willing to spend at most $150 on shopping, $20 per day on lunch (let’s assume that breakfast and dinner are provided), and an additional $100 on a particular special planned purchase. I already pre-registered, so the site fee has already been paid. If you’re still with me, that comes out to $290.

I could track the site fee, if I decided, by opening my books for this event on the date I pre-register. I would probably only initially furnish the event budget account with the amount of the site fee and wait until the event date is closer before I further supply the account with my shopping and food budget funds.

Furnishing Your Spending Accounts

This part is largely a matter of personal preference as to how you set it up. The bottom line is that your on-paper accounts do not contain any money until you provide them with opening balances. If everything that moves must both come from somewhere and go to somewhere, where do your opening balances come from? The answer there is a special account known as “Equity” (sometimes also known as “Capital”). Equity, simply-put, is everything you own at the time you begin tracking transactions. Don’t panic: you don’t have to do a full assessment of your total net worth to do this. Because you are only going to track a specific set of expenditures during a very short period of time, there is no need to make a paper record of absolutely everything. At minimum you need to know one of these two things:

• What is available: how much money you have in your checking/savings account(s), how much available credit you have, how much cash you have, and notes about scheduled transactions
• What is budgeted: how much you are willing to spend in total. This can be split into multiple accounts by category (aka an envelope system) or kept as one single account.

When you furnish a spending account with an opening balance, you deduct that amount from your Equity account and add it to your budget account(s) in whatever arrangement you see fit to use. Your Equity account does not care what your actual net worth is or that it appears to have a negative balance. It’s simply a placeholder (at least for this exercise) that ensures that your Ledger balances. You could think of the negative balance in the Equity account as a “loan” to the budget account (or better yet, a “grant”, since some or all of it isn’t coming back in the same form it goes out).

A merchant, being a merchant, would have also recorded goods and their values in accounts. If a merchant bought 100 pounds of ginger they would add 100 pounds of ginger at the price they paid to a “ginger” account and deduct the price they paid for the ginger from the account the funds used came from. Nothing has been gained or lost, it’s simply currency converted into product.

Journal and ledger entries as instructed by Fra Luca do not specify using negative amount notation (a “minus” sign) however I am going to use it in these examples to make them a bit easier to read. When you don’t normally work a lot with finance, the terms “debit” and “credit” may have different meanings for you, which can make things confusing.

Furnishing an account in the Journal:

The corresponding entries in the Ledger would be:

Account: Equity

Account: (Event Name) Budget

The Equity account’s balance is -$290 and the Budget account’s balance is $290. If you sum those two balances, it comes out to zero. So, you can be confident that your Ledger is balanced and contains no errors. If the sum is not zero, it is an indication that there is an error somewhere.

I have left the Ref cells empty in all three tables. In the Journal, you include the Ledger page number each entry is found on. In the Ledger, you reference the corresponding Journal page. The balancing ledger entry is referencd in the Ledger account line-item description. You can abbreviate these page refs as “L-1” or “J-1” depending on which book you’re referencing. If you wish to serialize your physical books, your Ledger page notation might be more like “L-A-1”, which would correspond to the first page of Ledger A (assuming that you are serializing your books alphabetically). You might wish to fully close your Event books on an annual basis, in which case you could serialize them using the current year.

If you expect to have a lot of accounts, you may wish to use the first page or first few pages of the Ledger to make a cross-reference. Divide the page or pages into alphabetical sections (A-D, E-J, and so on), write each account name under the correct section, and put the page number where the account appears next to the account name. Now when you need to find the page that has the account you need, you can check the cross-reference and know which page it is on.

If you know you’re going to be adding entries to a specific account, you can set up a page for it in advance to save yourself some time, but typically accounts are not created in the Ledger until they are needed. If you know that an account will only need a short space in total, you can put more than one such account on a page, leaving a sufficient amount of blank space between them.

You are now ready to attend your event!

Using Your Books

Adding a New Transaction

Whenever you make a purchase, pull out your Memorandum and note in it the nature and amount of the transaction. If you’re bypassing the Memorandum and going straight to the Journal, add the entry to the Journal immediately.

Memorandum

Note that if you are tracking more than one real account (“debit card” and “cash” count as two accounts), you should specify in the Memorandum entry which account was used in the transaction.

ATM withdrawals are transfers from your account tied to the card you used and your “cash” account. You will need to itemize the withdrawal fee in the journal, so note it in the Memorandum or keep the receipt. We’ll talk about handling those further down.

Transferring to the Journal and Ledger

When you get to a point where you would like to assess how you are doing, or how much you have left to spend, find a spot, preferably a seat at a table where you can more comfortably do some writing, and transfer your Memorandum entries into your Journal, making a mark on each Memorandum entry (or adding the reference to the Journal page) to note that you have transferred the entry to the Journal. Then, transfer the entry from the Journal to both corresponding accounts in the Ledger. If you do not yet have a corresponding account started in the Ledger, start one on the next available page.

Journal

Ledger

Account: Equity

Account: (Event Name) Budget

Account: Les Chapeaux d’Etienne

So now, the Equity account’s balance is -$290, the Event Budget Account’s balance is $285, and the “Les Chapeaux d’Etienne” account’s balance is $5. $285 + $5 - $290 = $0 – Great! Our Ledger is balanced and we know that we still have $285 left to spend.

Itemizing: Handling ATM Fees and Sales Taxes

When you withdraw money from an ATM, the bank that runs the machine charges a convenience fee. Your bank might also charge an additional fee. Some banks will not only not charge a fee, but will reimburse you for any fee charged at the point of withdrawal, usually up to a certain limit.

If you are going to eat the fees, you’ll want to itemize them - because you’ll need to deduct the fee from your banking (or budget) account but you will only add the face value of the bills you get from the machine to your cash account.

Journal

Ledger

Account: Equity

Account: (Event Name) Budget

Account: Les Chapeaux d’Etienne

Account: Cash

Account: ATM Fee

Trial Balance

If we want to see if our Ledger balances but we’re not closing our books, we should do what is known as a “Trial Balance”. We use a separate sheet of paper to do this.

Sum the debit columns of all accounts (except Virtual Accounts), and also sum the credit columns the same way. If your records are correct, the resulting sums will be balanced. If you’re using negative figures in the credit column, adding the credit and debit sums together should equal zero. If you’re not using negative figures, you will subtract one column’s sum from the other.

Closing Our Books

After you return home from the event, we, at minimum, probably won’t use our “Event Budget” account again, so we can return any balance left to the Equity account and close that particular Event Budget account, while leaving the books themselves still open for the next event.

The merchandise you buy becomes part of your Equity, whether you record that or not.

When We’re Done for Good

If we know we’re fully done using these particular books, we can close them out completely. Return any funds in accounts you hold to the Equity account, verify that your Ledger still sums to zero, produce any reports you want, and make some kind of indication on each book that they are closed and should not be used to record further transactions. They are now a historical record. If you decide to open a new set of books later on, it may be wise to do so in a new serial set rather than continuing to use any empty space in the physical books that are now closed.

When We Want to Go On As Before

If we want to use the same books to track the next event, setting that up will mainly involve establishing an account for that next event’s budget and furnishing it with the amount you decide.

Annual Books Closing

At the end of the calendar year, we can leverage our use of separate budget accounts for each event to create a report detailing where we spend the most money.

I Hated This Whole Thing!

If this was the worst experience you’ve ever had, you never want to think about it again, and you don’t want books around reminding you about it, it’s okay to throw it all out. Really. Even if it’s not done. If it’s making you hate life, get rid of it. With spite, if necessary.

Extra Tools

Categories, or Virtual Accounts

You can use a more modern technique known as Virtual Accounts to make it easy to break down your spending into categories or to make sure you aren’t spending too much in one category at the expense of another. This can be helpful, for example, if you want to earmark your lunch money for every day you’ll be at a week-long war, so you can still afford to eat on the last day.

To do this, in each Journal entry you can add some additional lines that reference virtual accounts. Mark them in some way - in both the description and credit columns - so you know they are virtual.

Here, we add an “Accessories” category, marking it as virtual by enclosing it in square brackets.

Journal

Ledger

Account: Equity

Account: (Event Name) Budget

Account: Les Chapeaux d’Etienne

Account: [Accessories]

Note: When you go to balance your Ledger, you must not include any of the amounts recorded within virtual accounts, or your Ledger definitely will not balance. Notice above that the [Accessories] account entry does not have a balancing entry anywhere else in the Ledger.

We can use the same method to earmark funds, but instead of transferring money into a virtual account as we make purchases, we will transfer money into them when we furnish our accounts, and then deduct money when we make purchases. You will need to pay attention to which direction the virtual funds are flowing and be consistent or you’ll have incorrect figures - and because virtual accounts can’t be included when summing your Ledger, you won’t be able to catch mistakes as easily.

Journal

Ledger

Account: Equity

Account: (Event Name) Budget

Account: [Shopping]

Account: [Lunch]

Account [Special Purchase]

Then, when you add the transaction for Les Chapeaux d’Etienne, your books will appear thus:

Journal

Ledger

Account: Equity

Account: (Event Name) Budget

Account: Les Chapeaux d’Etienne

Account: [Shopping]

Account: [Lunch]

Account [Special Purchase]

Reading Historical Documents

There is a great wealth of surviving financial data, and a lot of it is in the form of double-entry. If you understand the basics of how to keep double-entry books, you will likely find it pretty easy to understand someone else’s double-entry books - even those written 500 years ago (language and penmanship barriers notwithstanding).

Resources & Further Reading

All of the below listed resources - except for The Merchants Mirrour - aided me in putting this tutorial together.

• “Lost in Translation: Pacioli’s de computis et scripturis”, 2022, Alan Sangster, Fabio Santini, et al.
• Particularis de Computis et Scripturis - a Contemporary Interpretation, 1994, translated to English by Jeremy Cripps
• Ancient Double-Entry Bookkeeping, 1914, translated to English by J.B. Geijsbeek
• The Merchants Mirrour, 1636, Richard Dafforne
• Double Entry, 2012, Jane Gleeson-White

Inspiration

I got the idea to do this tutorial while exploring terminal-based bookkeeping applications like ledger-cli. Tools like ledger-cli can be useful for post-event analysis - you provide a plain-text file containing your Journal entries and it will crunch all that data for you and spit out a variety of reports on demand.

Errata

Polite reports of errata may be sent to 223686@members.eastkingdom.org.