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Comment by mportela | Hacker News Reader

Hi, all!

I'm not an accountant but decided to study double-entry bookkeeping and basic accounting a while ago. I learned a lot from many places, including great threads here on HN, and wanted to give back to the community. In this article, I explain the mechanics of double-entry bookkeeping and how I came to realize it's a directed graph.

I know there are many accounting nerds on HN so please feel free to criticize or suggest changes where I got things wrong!

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One of those threads may have been a blog post by Martin Kleppmann [1], who also describes double-entry bookkeeping as a directed graph.

[1] https://martin.kleppmann.com/2011/03/07/accounting-for-compu...

I’ve been in finance for nearly 20 years and okay, so, I’m kind of hesitant to admit… this is so great. Would love for my controllers to create such graphical flows of operating results. At some scale accounting gets pretty hard (hard as in at least one professor on the accounting policies team) and what I’ve learned from statistics is that graphics matter (Ross Ihaka, Andrew Gelman). With the appropriate abstraction any figure can get a graph of the constituting components. Moment of clarity here, thank you.

> and how I came to realize it's a directed graph.

One of the funnest things in computer science is realizing how some problem that you may not suspect initially turns out to be some type of graph.

Nice article, congratulations. I have worked with information systems all my life and one of the biggest insights I had was that the transaction, a purchase or a sale, which is the basis of the ERP system, is converted into 2 flows, the money that enters or leaves on one side and the product or service in another, this is accounting double entry. It may be obvious and simple, but I see that few people in my area have this understanding.

Just wanted to say, I have been trying to understand double-entry bookkeeping for 30 years now and this is the first explanation that finally clicked for me so thank you!

Great article. I would love an RSS feed or place to subscribe on your site so I can be sure to read the next in the series

Thanks! I just set up my RSS feed here: https://matheusportela.com/atom.xml

Let me know if it doesn't work for you!

Works great, thanks for setting it up!

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