The Single Entry Bookkeeping System – Maybe Not Such a Bad Concept After All?

Projects gets bigger and bigger, big projects get more and more gigantic. And more and more often, more and more things go wrong. And even if things do not go wrong, the usefulness is often very limited and the price is high. What if what they say is true and actually small but refined is better?

In the public domain, they used to do their accounting with the single entry bookkeeping system. In other words, they did a simple input-output calculation.  There were no assets to be considered and to be used for justifying debts. Debt-free fiscal accounting means that you can only spend as much money in a certain time interval (usually one year) as you actually received.

This means that if you build an opera building or a bridge, you have to receive the money you spend for this project during the same year. And you cannot activate these investments as assets and thus justify your debt.

The communities that remained loyal to this method have been criticized all over the place. Consequently, the single entry bookkeeping system was mostly abolished in the public sector.

In retrospect, however, I think the principle was not such a stupid idea. Because, naturally, it will initially make huge investments with doubtful “returns of invest” hard.

And perhaps the principle of single entry bookkeeping could give us a little more moderation when it comes to mega financial and gigantic projects which, when thought through, often basically only render a questionable added value.

Consequently, I will, once more, play the role of the heretic and demand our return to single entry bookkeeping.

RMD
(Translated by EG)

P.S.
Here is the term in Wikipedia.

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