The news that Wang Bo officially joined the Jinxiu Pavilion did not cause much of a stir in the Shen family. In the eyes of many people, it was nothing more than the second young lady finding an old and down-and-out accountant to replace the equally elderly Liu Accountant. When Shen Zhongkang heard this, he just sneered, thinking that Shen Ruoxin had no one to use and had picked up a few discarded "good-for-nothings" without giving them a second thought. On the Liu side, they sent someone to inquire a bit. After learning about Uncle Wang's "background", they temporarily felt relieved, thinking that an old man who couldn't even keep his job wouldn't cause much of a stir.
They all underestimated Shen Ruoxin's determination, and even more so, the power of Wang Bo, the "iron abacus", as well as the disruptive force contained in the brand-new system that Shen Ruoxin called the "double-entry bookkeeping method".
Shen Ruoxin deliberately tidied up a quiet and well-lit small courtyard in the back yard as Wang Bo's exclusive accounting room. Not only are there all kinds of fine brushes, ink, paper, inkstones and abacuses inside, but there is even a small charcoal basin to ensure warmth and comfort even in winter. This respect and emphasis made Wang Bo, who had experienced the ups and downs of the world, feel at ease and strengthened his determination to "die for one's confidant".
Second Miss, this... Do the words "borrow" and "loan" here not refer to the actual lending and borrowing? Wang Bo sat behind a brand-new desk, holding several tables and brief explanations written by Shen Ruoxin herself in his hands. His brows were furrowed, and his face was filled with both confusion and uncontrollable excitement. These days, whenever Shen Ruoxin had free time, she would come over and explain to him in detail the principle and specific operation of double-entry bookkeeping.
"Uncle Wang can understand it this way," Shen Ruoxin patiently explained, "The 'borrower' represents an increase in assets, the occurrence of expenses, or a decrease in liabilities, owner's equity, or income." On the contrary, the "lender" represents the reduction of assets, the carry-over of expenses, or the increase of liabilities, owner's equity, and income. Each transaction involves at least one borrowing and one lending direction, and the total amount of both the borrower and the lender must be equal. In this way, the accounts can be interchecked and verified with each other.
She picked up a blank sheet of paper and gave an example, saying, "For instance, we sold a piece of brocade and received ten taels of silver in cash." Then, on the ledger, the account "Inventory Goods - Brocade" should be recorded on the credit side, indicating a decrease in assets. The "cash on hand" account should be recorded on the debit side, indicating an increase in assets. Look, one borrowing and one lending, the amount is both ten taels, exactly the same. In the future, both inventory checks and cash counts will be able to verify each other.
Uncle Wang's eyes widened, the abacus beads in his hand moved rapidly, and he muttered to himself, "There must be a loan for every loan, and the loan must be equal..." So that's it! So that's it! The increase or decrease of assets and liabilities all correspond! Wonderful! How wonderful! The more he pondered over it, the more he felt that this method was exquisite and far beyond what the traditional single form of accounting could compare with. Single bookkeeping is like a flowing river, only recording the coming and going. This double-entry bookkeeping, however, is like a precise net, firmly locking every transaction in its corresponding position, with distinct longitude and latitude, and a clear thread!
"Second Miss, if this method can be carried out, not only will it be as difficult as climbing to the sky to make a mistake in one's account, let alone embezzle one's own money!" Uncle Wang stood up excitedly, his grizzled beard trembling slightly.
Exactly so. Shen Ruoxin nodded slightly, "But the establishment of this system is not something that can be achieved overnight." The most urgent thing at present is to first sort out the old accounts of the Jinxiu Pavilion from the past three years using the principle of double-entry bookkeeping. I want to know where every income came from, where every expenditure went, where the deficit originated and how large it was in these three years!
"Old man understands!" Wang Bo's eyes sparkled with an unprecedented light. It was the excitement and dedication of a professional craftsman encountering a lifelong pursuit. "Don't worry, Second miss!" Even if I were to drain all my efforts, I would surely sort out these old accounts clearly and transparently!
In the following days, Uncle Wang was almost so absorbed in the vast amount of old accounts that he forgot to eat and sleep. Shen Ruoxin specially assigned the two young apprentices who were originally assisting Liu's accountant to Wang Bo and let him follow his orders. Liu, the accountant himself, was assigned by Shen Ruoxin to be in charge of the daily sorting of bills and the initial registration, which could be regarded as a transitional and adaptive period.
Looking at the "accounts" that Uncle Wang had set up, which he had never heard of before - such as "Fixed Assets", "Prepaid expenses", and "advance receipts" - and seeing him ask his apprentices to record each transaction on two or even more different pages simultaneously, Liu, the accountant, felt dizzy and completely at a loss. He felt both a bit down and dissatisfied in his heart, and at the same time, he had a vague feeling that Wang Bo's method seemed to be even more "powerful" than the one passed down from his ancestors. Sometimes he couldn't help but go up to ask for advice. Wang Bo didn't hold back and patiently explained, but Liu Zhangfang was completely confused and found it quite difficult to understand.
Uncle Wang is extremely efficient. Not only is he proficient in mathematics, but his memory is also astonishing. Many seemingly isolated income and expenditure items, after going through his mind once, could be linked to other related accounts. The framework of double-entry bookkeeping provided him with a sharp tool to dissect old accounts.
Just ten days later, Wang Bo found Shen Ruoxin with several newly made account books.
"Second Miss, the initial sorting has already shown some signs." Wang Bo's expression was solemn as he spread out the account books in front of Shen Ruoxin.
The new account books are different from the old ones. They are classified and the accounts are clear. On one of the "Expense detail Accounts", Uncle Wang circled several items with a red pen.
"Second Miss, please take a look. These are the funds spent over the past three years under various names such as' purchasing miscellaneous items', 'socializing with the owner', and 'repairing the shop'." According to the verification of double-entry bookkeeping, these expenditures are huge in amount and have an abnormal frequency. More importantly... Wang Bo pointed at a few of the transactions, "For instance, this 500-taels' purchase of new materials from Suzhou and Hangzhou 'was recorded by the eldest young master and the date was last July." However, based on the verification of the "inventory goods" detailed account and the "accounts payable", last July, we did not purchase such a large quantity of fresh materials from any familiar supplier in Suzhou and Hangzhou, and there were no corresponding warehousing records at all. Moreover, the serial number of the banknote used to pay this sum of money is consecutive with part of the serial number of the banknote used by the young master to purchase a separate courtyard outside the city a few days later.
Shen Ruoxin's expression darkened instantly. Consecutive serial silver banknotes! This is the most direct evidence! This means that Shen Zhongkang is highly likely to directly use the public funds he withdrew under the guise of "purchasing" to buy his own private property!
"And here," Wang Bo turned to another page, "the cost of 'shop renovation' is almost a considerable expense every one or two months." But according to the old man's private inquiry with an old fellow in the shop, the Splendid Pavilion has not undergone any major renovations in the past two years. And many of these expenditure receipts were issued by a distant nephew of Mrs. Liu's family. That man ran a small woodworking workshop of his own...
The accounts are cold, but the truth revealed behind the figures is shocking! Embezzlement, misappropriation, transfer of benefits... Liu Shi and Shen Zhongkang, this mother and son, simply treated the Jinxiu Pavilion as their own private repository, taking whatever they wanted!
"Uncle Wang, thank you for your hard work." Shen Ruoxin took a deep breath and suppressed the anger in her heart. "These accounts must be done solidly. Every transaction must be traceable and there can be no omissions at all."
"Second miss, rest assured. I understand." Double-entry bookkeeping emphasizes a complete chain of evidence and mutual verification, and is by no means based on groundless speculation. Uncle Wang said solemnly.
Looking at Wang Bo's meticulous expression and at the neatly organized account books on the table that gradually revealed the truth, Shen Ruoxin's heart, which had been in suspense all along, finally settled down.
Although the hole in the Splendid Pavilion was larger than imagined and the issues involved were more complex and dirty, she was no longer completely blind and at the mercy of others. With Uncle Wang and this advanced financial management system, she has mastered the most powerful data weapon!
She clearly knew where every asset of Jinxiu Pavilion was, how much each debt was, and what the real profit or loss was. This gives her a solid basis when making any business decisions. She can precisely calculate costs, control expenses, assess risks, set prices, and even predict future cash flows.
This sense of control is unprecedented.
"Uncle Wang, the sorting out of old accounts continues to be stepped up." At the same time, starting from next month, all new business activities of Jinxiu Pavilion must be recorded and accounted for in accordance with the double-entry bookkeeping method. Shen Ruoxin made a decision, "I will personally supervise the implementation." "Take care of Liu, the accountant, more often. If he really can't adapt, then make some arrangements."
"Yes, Second Miss."