Pacioli publishes double-entry bookkeeping

In November 1494 the Venetian printer Paganino de Paganini finished a huge book in Italian by Luca Pacioli, a Franciscan friar and mathematics teacher from the Tuscan town of Sansepolcro: the Summa de arithmetica, geometria, proportioni et proportionalita, more than 600 folio pages that gathered the mathematics of the day, from arithmetic and algebra to coins, weights and measures and Euclid's geometry. Pacioli dedicated it to the young Duke of Urbino, Guidobaldo da Montefeltro, and came to Venice to see it through the press; on the last page he says that he stood by the printers day and night. Inside the business part of the book, a treatise in 36 short chapters, 'Particularis de computis et scripturis' (on accounts and records), explained how a merchant should keep his books in what Pacioli called the method of Venice. It was the first printed description of double-entry bookkeeping.

Pacioli begins with what a merchant needs: money, a good accountant who is quick at figures, and good order in his books. He first takes an inventory of everything he owns, all on one day. Then he keeps three books: the memorandum, where each deal is noted as it happens; the journal, where it is written up in order, the account to be debited after the word 'Per' and the account credited after 'A'; and the ledger, where every entry is posted twice, as a debit in one account on the left-hand page and a credit in another on the right. Because each amount appears on both sides, the two sides must agree; at the closing of the books the totals of debits and credits are checked against each other in a trial balance, and profit and loss are worked out. His examples are dated November 1493, in Venice, and he advises closing the ledger every year.

Pacioli did not invent any of this, and never claimed to: he wrote that he followed the Venetian practice because it was the best. Italian merchants and bankers had been working the method out for two centuries. A Florentine company's ledger of 1299–1300 already records each sum twice; the city of Genoa kept its accounts 'after the manner of banks' from about 1327, and its treasurers' ledger of 1340 is the most famous early double-entry book; the merchant Francesco di Marco Datini of Prato (about 1335–1410) had the companies he owned around the western Mediterranean send their ledgers home to him, where most of them survive, and his company at Avignon kept double entry in 1409–1410. Benedetto Cotrugli of Ragusa described the method in a manuscript of 1458, and Marino de Raphaeli wrote a manual for learners in 1475. What Pacioli added was print and plain Italian: a complete guide that any merchant or teacher could buy.

The Summa made Pacioli the best-known mathematics teacher in Italy. In 1495 he was painted demonstrating Euclid beside a young nobleman, and by about 1496 he was teaching at the court of Ludovico Sforza in Milan, where he became the friend of Leonardo da Vinci, who drew the solids for his next book, De divina proportione. When the French took Milan in 1499 the two men left together for Florence. In 1508 Pacioli lectured in the church of San Bartolomeo by the Rialto, and in 1509 Paganini printed De divina proportione and his Latin Euclid. He died in Sansepolcro in 1517. The treatise outlived him: the Summa was reprinted in 1523, Domenico Manzoni rewrote its bookkeeping in Venice in 1540, Jan Ympyn adapted it in Antwerp in 1543 in Dutch and French, and the first English books followed, Hugh Oldcastle's of 1543, now lost, Ympyn's English version of 1547 and James Peele's of 1553.

For two centuries almost every bookkeeping manual in Europe came down from Pacioli's chapters, and the method has hardly changed since. Every company, bank and government still records each transaction twice, as a debit and a credit, so that the books balance and mistakes show, and the system he set out already held most of the accounting cycle used today. Accountants call him the father of accounting. In 1994 they gathered in Sansepolcro for the Summa's 500th anniversary, and his statue there, inscribed 'Summa 1494 1994', was raised by his fellow citizens and the accounting schools of Japan.