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The importance is in the "accountability" of accounting. By forcing each entry to cross accounts, you make each account reconcilable with the others. "Books" ar

The importance is in the "accountability" of accounting. By forcing each entry to cross accounts, you make each account reconcilable with the others. "Books" are no longer independent because they can be cross-checked. Where books are departments that makes departments responsible for justifying each entry in a way that is visible across accounts, to the cent. It's a validation layer. With double entry you can't cook just one book, you have to cook all the books.

rco8786 4y ago
This is what is sold in theory. Practice is wildly different. Reconciling across departments looks absolutely nothing like what you’ve described and does not go to the cent or even close. As long as in you’re in the ballpark of reconciling and can reasonably explain the sql queries and reports that got you to a number within an okay range of error you’re good to go.
- doctor_eval 4y ago
  This is absolutely not my experience at all. Books that don’t balance to the cent suggest a problem that needs to be resolved. Electronic books that don’t balance to the cent are defective. I’ve certainly seen lax accounting and reconciliation practices in businesses such as those you describe but it’s absolutely not been the norm in my experience.
  - nulbyte 4y ago
    I agree, mostly. You have to understand the implications of a few cents' difference. One cent (or even one dollar) could be the effect of rounding. Or it could be a single typo. Or it could be multiple errors involving larger transactions with opposite signs.
  - rco8786 4y ago
    > Books that don’t balance to the cent Individual books, yes (though I am still very dubious of the value in doing this given the guarantees that modern computers/databases offer). I'm talking specifically about cross-department reconciliation where different departments are keeping their own books and have their own data pipelines/etc. They absolutely still have to be reconciled, but there is no expectation of an exact match from the SEC or internal/external auditors.
jimnotgym 4y ago
Can I give an example to extend your comment. I have a remote shop that takes cash and credit card payments. If i just ran a cash book like some on here are suggesting how would I know my sales for a day? I could wait until the money hits my bank account and categorise it, but then how much of that money is sales tax not sales? How much did the goods they sold cost me? Did they put all of the cash in the bank or did they steal some. Did the credit card merchant pay me everything due? Imagine the customers have credit terms with you? Now when do you know your sales, when they pay? What if they don't pay? Double entry has answers to all of those questions.

rco8786 4y ago

This is what is sold in theory. Practice is wildly different. Reconciling across departments looks absolutely nothing like what you’ve described and does not go to the cent or even close. As long as in you’re in the ballpark of reconciling and can reasonably explain the sql queries and reports that got you to a number within an okay range of error you’re good to go.

doctor_eval 4y ago
This is absolutely not my experience at all. Books that don’t balance to the cent suggest a problem that needs to be resolved. Electronic books that don’t balance to the cent are defective. I’ve certainly seen lax accounting and reconciliation practices in businesses such as those you describe but it’s absolutely not been the norm in my experience.
- nulbyte 4y ago
  I agree, mostly. You have to understand the implications of a few cents' difference. One cent (or even one dollar) could be the effect of rounding. Or it could be a single typo. Or it could be multiple errors involving larger transactions with opposite signs.
- rco8786 4y ago
  > Books that don’t balance to the cent Individual books, yes (though I am still very dubious of the value in doing this given the guarantees that modern computers/databases offer). I'm talking specifically about cross-department reconciliation where different departments are keeping their own books and have their own data pipelines/etc. They absolutely still have to be reconciled, but there is no expectation of an exact match from the SEC or internal/external auditors.

jimnotgym 4y ago

Can I give an example to extend your comment. I have a remote shop that takes cash and credit card payments. If i just ran a cash book like some on here are suggesting how would I know my sales for a day? I could wait until the money hits my bank account and categorise it, but then how much of that money is sales tax not sales? How much did the goods they sold cost me? Did they put all of the cash in the bank or did they steal some. Did the credit card merchant pay me everything due? Imagine the customers have credit terms with you? Now when do you know your sales, when they pay? What if they don't pay? Double entry has answers to all of those questions.