AN IMPROVED SYSTEM OF BOOK-KEEPING
Year: 1860

page_text: LETTERS PATENT to Alexander Ritchie, of the City of Glasgow, in the
County of Lanark, Accountant, residing ȧt Number Four, Oak Vale,.
Hillhead, near Glasgow, aforesaid, for the Invention of "AN IMPROVED
SYSTEM OF BOOK-KEEPING."
Sealed the 17th October 1860, and dated the 24th April 1860.
PROVISIONAL SPECIFICATION left by the said Alexander Ritchie at.
the Office of the Commissioners of Patents, with his Petition, on the
. 24th April 1860.
I; ALEXANDER RITCHIE, of the City of Glasgow, in the County of Lanark,
Accountant, residing at Number Four Oak Vale, Hillhead, near Glasgow,"
aforesaid, do hereby declare the nature of the said Invention of "AN IN-
PROVED SYSTEM OF BOOK-KEEPING," to be as follows:―
Having kept the first records of transactions, or any condensed form or
summary of such records for any period or section in a simple.consécutive
form, I obtain at the end of that period or section by addition a factor, by
which the accuracy of the book-keeping can be tested. In posting or
transferring each such period or section, I use an ink varying in color from
that with which the other sections or periods, or the remainder of the trans-

page_text: actions not intended to be subjected to the test are posted or transferred, and
which from its distinctive character gives to the entries belonging to each such
period or section of the books a prominent position, whereby errors can be
easily traced, and thereby furnishes also a strong bar against fraud.
I claim as peculiar the systematic application of distinctive inks in posting
the sections, periods, or classes of transactions so summed up in the first
record, and made capable of the application of the balance test...
And I further claim to divide the ledger into successive portions by
transverse bars of varying colors, and so to facilitate the revisal at any time of
the transactions of any period so kept.
SPECIFICATION in pursuance of the conditions of the Letters Patent, filed
by the said Alexander Ritchie in the Great Seal Patent Office on the
24th October 1860.
TO ALL TO WHOM THESE PRESENTS SHALL COME, I, ALEXANDER
RITCHIE, of the City of Glasgow, in the County of Lanark, Accountant,
residing at No. 4, Oak Vale, Hillhead, near Glasgow, aforesaid, send
greeting.
WHEREAS Her most Excellent Majesty Queen Victoria, by Her Letters
Patent, bearing date the Twenty-fourth day of April, in the year of our Lord
One thousand eight hundred and sixty, in the twenty-third year of Her reign,
did, for Herself, Her heirs and successors, give and grant unto me, the
said Alexander Ritchie, Her special licence, that I, the said Alexander
Ritchie, my executors, administrators, and assigns, or such others as I,
the said Alexander Ritchie, my executors, administrators, and assigns,
should at any time agree with, and no others, from time to time and at all
times thereafter during the term therein expressed, should and lawfully might
make, use, exercise, and vend, within the United Kingdom of Great Britain
and Ireland, the Channel Islands, and Isle of Man, an Invention for
"AN IMPROVED SYSTEM OF BOOK-KEEPING," upon the condition (amongst others)
that I, the said Alexander Ritchie, my executors or administrators, by an
instrument in writing under my, or 'their, or one of their hands and seals,
should particularly describe and ascertain the nature of the said Invention,
and in what manner the same was to be performed; and cause the same
to be filed in the Great Seal Patent Office within six calendar months next
and immediately after the date of the said Letters Patent.

page_text: NOW KNOW YE, that I, the said Alexander Ritchie, do hereby declare
the nature of my said Invention, and in what manner the same is to be
performed, to be particularly described and ascertained in and by the following
statement (that is to say):-
This Invention consists the systematic application of a variety of colours in
several ways to purposes of book-keeping, to which such or any variety of
colours has not heretofore been so applied, and in the arrangement of the
books, which I call journals, in respect of ruling and reference numbers, or
other sequence, as after explained, and the mode in which I use these, that is,
in the performance of a systematic "class" or "abstract" balance, which can
be followed up in the treatment of the individual' accounts by a balance of the
individuals with their class, thereby confining the process of balancing within
narrow limits.
First, the simplest and least effective application of the Invention consists
in systematically checking each month or other portion of the time between
general balances on the ordinary system with a different colour of ink or pencil,
whereby the constituents of the postings for any period, short or long, to the
ledgers can with facility be gathered, and their sum compared with the total
for such period brought out as the aggregate of the summations of the journal
or. other subsidiary books. Combining such a manner of checking with a
system of division lines drawn across each open ledger account at each
balance, the varying colours of the cross lines and of the check marks can
be made to ensure any required extent and precision of review. This device
can be applied to any record however old. A similar application of the
Invention may be made through the posting clerk using when posting a
varying colour of ink for each portion of time between balances which he may
desire to balance by itself. This affords additional facility in gathering the
postings from the ledger accounts, and it may be combined with a system of
transverse lines, all as above described.
Second, in the second application of the Invention colour is not made the
co-relative of time, as in the foregoing, but of class, and it is thus used to
effect classification without the use of so great a variety of colnmns. It may
be used in the classification either of pieces or quantities of goods, or of
money. In classifying either goods or money there is always a specific
number of classes or genera into which they are to be divided. For each such
class it is needful to choose a distinct colour, by which it will be recognized
throughout the entire operation, that is, throughout the record which is to be
analysed or classified. The colors having been arranged as indicative of

page_text: classes, taking due care that they are not too numerous to be easily worked
in good light. I provide on the face of the first general record of the
transactions that are to be classified, and as closely adjoining as may be to the
first record, a column or (in the case of money), a set of, columns, into
which the identical items of goods or money can be all written a second time,
but with the distinctive colour of ink or other material that belongs to the class
of which the necessary definition is upon the same line. This may be done in
a separate book, into which the items are written in consecutive, order, and
the necessary columns for analysis can be put in that book. The totals
obtained by. addition of the plain column first recorded, and of the variegated
column are the same, while the addition of each colour by itself gives at once
a perfect analysis and a complete check. As a general rule no colour or class
should be filled into the classification column until it is to be added. In most
cases when it is added the result should agree with something external to it,
such as prices, or money on hand, which operates as a check against the use
of wrong colour, and upon erroneous additions, and will thus prevent error.
The association habitually of colours with things engenders at the same time a
habit of mind which aids in preventing mistakes.
In form I., I exhibit as an illustration the classification both of the goods
and the money specified in the sales of a woollen yarn merchant's stock, so as
to bring out, first, the total weight and value of the sales for the day; and,
second, (with the use of form II.,) the weight and value of each class sepa-
rately. The number of classes can be extended by the use of a greater variety
of colours in the same column, or by using additional columns to subdivide in
a similar manner one of the colours which may be made at first, inclusive of a
variety of classes; or certain classes may be altogether omitted from the first
column and appear only in the second.
'
The same process can be pursued with purchases, sales, and stock on hand.
so as to bring out a perfect general balance of the transactions so classified, and
this may be done daily, weekly, or at any interval. It is also equally applicable
to quantities of any description of goods, materials, or money, which, having
been expressed in numerals, are to be classified.
Form 11. shows the mode of applying the additions of the classes, so as to
bring out in the stock book the exact position of matters periodically, exhibit-
ing in green or other distinctive colour the stock on hand of each class, with
the unrealized balance of consigning, cost, or other prices; and in red or
other distinctive colour, the real value of the stock of each class when that is
wanted.
;

page_text: In the remaining portions of the forms I illustrate the application of the
Invention to the keeping of the money accounts of a merchant. With suitable
and easy modifications of my system, the same ideas may be applied to bring
out the abstract or class results desired in any kind of business by choosing
different classes or divisions.
The first object I keep in view.is, the performance of an exhaustive (and
therefore; to some extent, self-checking) analysis of the whole transactions of the
business, by throwing them into grand abstract classes, such as the trader may
select as likely to prove most instructive to him in the conducting of his affairs.
Properly executed, this analysis comes out in a perfect abstract balance daily,
or as often as it may be desired. It can be executed either by the use of a
variety of colours in the same column to denote classes, or by the use of a
variety of columns to contain the classes in one colour. In arriving at the
more detailed information wanted in regard to the individual accounts of
debtors and creditors, I make up an accurate statement of each, and adding
them, I can obtain the instantaneous check of a balance; I can ascertain what
their accumulated-amount is before I begin to make them up; and to be con-
scious of accuracy, it is only needful that I reconcile the sum of the individual
debts with the previously ascertained total of the class. Combining with this
limitation of the balancing process a system of simple consecutive records of
transactions showing their debit and credit aspects with reference numbers to
pages and also to lines and aspects, (which may be filled in with the hand, but
which I prefer to print,) I gather together the whole constituents of any indi-
vidual account by means of a record of the pages and lines thrown into an index
made for the purpose. The numbers by which debits are distinguished are
always odd, and those of credits always even, and this of itself furnishes instruc-:
tion to a limited extent from the index per se. The individual accounts having
been balanced with the summary of their class, may be thereafter copied by
press or hand into a book for the purpose. The Nos. 2/465, 2/466, &c. in
form IV. (the progressive account book or ledger) refer to this book and its
successive pages in which the copy has been made. Or, they may be collected:
in the first instance (though at a little more inconvenience, yet still with an:
amount of labour much less than in the ordinary process of posting) by means
of the index into a ledger..
"
In form III. I exhibit one classification into which the balance of a trader's
accounts may be made up and brought forward daily, or as often as desired.
Form IV. is the progressive account book or ledger to be made up monthly
or at other periods of the individual accounts of debtors and creditors, which
,

page_text: should appear in this book in exact alphabetical, local, or other previously
arranged order in the index, suitable to the requirements of the particular
business, and which balances precisely with the state of the abstract accounts
in the balance sheet for the day. This form contains provision for recording
the cash or other operation arising in respect to the items last rendered
between the time of that and the next rendering, and also the amount of new
furnishings for the month.
Forms V., VI., and VII. show respectively the transactions (V.) with
debtors, (VI.) with creditors, and (VII.) those of a private character, and the
mode of recording and classifying them. In all three the simple record of the
transactions is kept in one (say, black) ink, while the analysis into classes by
means of colours selected for the purpose is performed at convenience there-
after, and the results are recorded as they are ascertained, or at convenience
in form VIII. By the use of other columns for colour analysis I can incor-
porate the forms V., VI., and VII., or two of them; or I can in the same way
divide any
classification or portion of it into subordinate classes; or I can use
a variety of columns with only one colour. Form VIII. is a repetition of
form III.; modified in the filling up by the transactions of the day. The addi-
tion of the items thrown out in black in the debtors' and creditors' journals,
gives the transactions in cumulo with debtors and creditors for the day, and so
with the other colours and relative classes.
The process varies in no essential respect whatever, be the time that is
included in the analysis drafted from the journals, the number of the transac-
tions, the variety of classes, or the description of business. Colour is to be
held as the co-relative of class, without specifying that a certain colour shall
always be set apart for a certain class. Classes and colours may both be
differently arranged in different sets of books. It is not necessary that num-
bers shall be always used, but simply that there shall be combined with the
general analysis above described an understood sequence of running numbers
or letters, by the use of which an analysis into species or individual accounts
may be facilitated. The arrangement of columns on the page or pages of the
records may vary indefinitely so long as these two objects are systematically
kept in view. The general analysis may be wholly performed, though less
conveniently, by the use of a different column for. each class in place of a
variety of colours in the same column.
Having performed a complete analysis into classes, I proceed, by the use of
the index form 1X., to record the pages and lines of the journal entries as
against the individual accounts. The running number on the left hand of the
c

page_text: pago
names shows the folio of the ledger in which the items indicated by an
opposite may be recorded, or if form IV. is adopted in the shape given, the
running number is the same in it as in the index. The analysis of the whole
page and line numbers (or marks), by means of the index, is made as exhaus-
tive as the previous general analysis is of the whole amounts by using form X.
the check number sheet.
Having ascertained by using this check that all the numbers that required
to be indexed have been so entered, the items of the accounts can be gathered
with great rapidity by the use of the references. When so gathered and
added, the totals of the items so indicated in the index must agree precisely
with the total of the class in the balance of the same day. By using a sepa-
rate index and relative ledger or account book, or a separate portion thereof,
for each class' into which the individual debtors' or creditors' accounts are
analysed, the balancing process is easily confined within the class. When the
individual accounts are to be made up for rendering or payment (if not more
frequently), form IV. must be again used for a new adjustment of the state of
the debts at the date.
This will agree as before noted with the balance of the classes just as those
in form IV. do with the balance in form III.
In connection with the classification by means of colours already described,
and to facilitate the distinction of different classes within departments of mer-
cantile houses, I may use for putting prices or lengths upon each class tickets,
varying in colour from those with which the other goods are marked, and by.
which it may always be recognized. And for the bought slips to be sent from
the department to the entry room or counting-house, I may use a different
colour of paper for each department, by which it may be recognized as belonging
to the department. The same distinctive mark may be applied as between
divisions or branches of any description of business, the same colour being as
far as possible retained as indicative of the same article, or class, or depart-
ment throughout. But this use of a paper is not a necessary integral part of
my system.
Having now described the nature of my Invention, and the manner in
which the same is to be performed, I claim as my Invention,-
First, the combined systematic applications first above described of colour in
checking or posting and in drawing transverse lines for purposes of review,
giving powers at once extensive and minute.
Second, I claim the combined system of book-keeping secondly before
described and illustrated.

page_text: Third, I claim more particularly the combination in commercial or business
records of the exhaustive, general, or class analysis described and illustrated,
or any similarly exhaustive analysis by columns in place of colours with the
facility for individual or special analysis afforded by reference marks to lines as
well as pages.
Fourth, I claim the combination of the mode of arriving at the items
of individual accounts by an index, and the condensed records of the details
thereof in an account book, with, the progressive ledger or monthly list of
accounts..
In witness whereof, I, the said Alexander Ritchie, have hereunto set
my hand and seal, this Twenty-fourth day of October, in the year
Lord One thousand eight hundred and sixty.
ALEX RITCHIE. (L.S.)