Chapter 17 The Numbers That Have Come Into View
Now that the current period's accounting has been settled, it's finally time for this period's bookkeeping.
However, Sara felt extremely uneasy. Although she had sensed it vaguely during the previous accounting work, there was no such thing as a "double-entry ledger" in this world.
The Grandchester territory was vast, with a wide range of handled goods and many trading partners. Naturally, there were numerous items to manage, including fixed assets, current assets, net assets, liabilities, revenue, cost of goods sold, and various expenses (which were further divided into finer categories). Despite this, the ledger was single-entry.
'It's not that single-entry ledgers are bad, but the amount of information is too little, making it difficult to understand the management situation. It's like they're saying it's impossible without a specialist.'
The taxes collected from the people of the territory were not only in cash but also in various forms such as wheat, minerals like ore and magic stones, and processed goods like cotton cloth and woolen fabrics. At this time, what was necessary was a ledger of taxpayers with tax obligations, a record of income and expenses to calculate the tax amount, and a record to prove that the tax had been paid.
The procedures for this were handled by the guilds that governed each industry, so the bureaucrats received records from the guilds and temporarily stored the paid taxes, such as cash and agricultural products, in the guild's warehouse.
These goods were either stored for future use or sold to merchants and converted into cash, but most of them were directly transported from the guild's warehouse.
Although there was no banking system in this world, merchants often used bills of exchange in their transactions. The bureaucrats in the territory only received and processed the records of sales and bills of exchange, so they rarely saw the actual goods that had been taxed. It seemed that the previous governor and accountant had made a mess of things, and there were likely accomplices on the guild's side as well.
The problem with single-entry ledgers was that they only showed "purpose," "income," and "expenditure."
For example, even if it was written as "×× merchant guild sold wheat for 1,000 dal on 〇 year 〇 month 〇 day," it was unclear whether it was a bill of exchange or cash, and this ledger alone couldn't provide an understanding of that. All that could be understood was "when, what, where, and how much was sold."
In another ledger, the receipts of promissory notes were recorded, and by referring to this, it was possible to confirm "when, from which merchant guild, and how much of the promissory note was received." However, in the case of cash transactions, it was necessary to check another cash ledger.
Such records were created for each accounting category, and due to the lack of visibility and complex accounting processes, it was difficult to clarify past irregularities. In this state, it would be a daunting task to uncover past wrongdoing.
'Ah, it's not like we're using accounting software, but if only we could use Excel... .'
Sarasa thought, feeling the pain of how easy it was during the Sarasa era, as she compared the numerous ledgers lined up in front of her, getting tired of it in just one day. And eventually, she couldn't take it anymore and decided to introduce at least double-entry bookkeeping.
That day, since there was no homework, she created a simple accounting textbook before bed and lectured Robert, the bureaucrats, and the office maids on how to use double-entry bookkeeping from the next day. The bureaucrats with excellent brains quickly understood the benefits of double-entry bookkeeping. At first, they came to ask Sara how to use it, but they were able to master it in just 3 days. The maids also learned naturally as they followed the bureaucrats' instructions and performed their duties.
And a week later, the office members who had mastered double-entry bookkeeping realized a terrifying fact. It started with Sara's bombshell statement.
"Uh, the total amount of promissory notes issued by the Grandchester domain is... 150,000 Dallas!? Wait, the promissory notes I have on hand are... only 80,000 Dallas."
The currency of this country is such that one Dal is equivalent to one copper coin, and the price balance is quite different from the previous life, so it's not very accurate, but the value is approximately one yen. 10,000 Dal is equivalent to one Dallas (one gold coin). In other words, the Grandchester domain is currently issuing promissory notes worth around 1.5 billion yen.
The promissory note issued by the Grandchester domain will be sent to the Grandchester domain through the Merchant Guild, requesting payment. If the payment is not made within 3 days of the request, a penalty will be imposed, and no promissory notes will be issued for 2 years. Moreover, if the payment is not made in cash, it will be publicly announced throughout the country through the Merchant Guild, which will take even more time to recover from the damage to their credibility. For a noble family, it would be an irreparable shame.
James reacts to Sara's words.
"Our domain's cash reserves are barely over 50,000 Dallas. If we were to cash in the promissory notes all at once, it would be a disaster."
Payment of the promissory note can be made not only with cash or other promissory notes but also with movable assets like wheat, iron ore, and magical stones. However, since the valuation would be low, it's generally avoided.
Ben, who has actually gone to the warehouse and grasped the exact amount of stockpiled goods, joins in.
"To avoid delaying the payment of the promissory note, we need to prepare cash or other promissory notes quickly. However, the amount of stockpiled goods, including wheat, iron ore, magical stones, cotton fabric, and woolen fabric, is less than half of what it usually is. The wheat shortage is particularly severe, and if a famine occurs, it will be difficult to get through the winter."
In the current situation, where the stockpiles are already depleted due to the misappropriation of funds, selling the goods might not solve the problem. Moreover, there's a risk that the people of the domain might starve if the goods are sold. Additionally, although the country doesn't impose taxes on the domain's stockpiles, selling the stockpiled goods would generate revenue, and taxes would be imposed.
No matter how you think about it, Grandchester is currently drowning in debt. Robert can only hold his head in his hands.
"What a mess. First, let's send a fast horse to Father. We'll probably have to sell some of the Grandchester family's treasures. No, Father might refuse, saying it's shameful. Or we could ask the merchants to hold off on cashing in the promissory notes."
"Uncle, please don't do that. It will only make things worse if the domain's finances deteriorate further."
Here, Sara asks a question.
"Is the cashing in of promissory notes done entirely through the Merchant Guild?"
"The Grandchester territory's government office doesn't have a window for cashing in, so we inevitably have to go through the Merchant Guild."
"Is it possible to not use the Merchant Guild for transactions between merchants or individuals?"
"Yeah, using the Merchant Guild means we have to pay a handling fee. Sometimes we can just bring it directly to the issuer."
"How much is the handling fee?"
"It's 10% of the received amount."
"Huh? That's too high, isn't it?"
"Well, when we use the Merchant Guild, they take on the risk of non-payment, so it's not just a simple handling fee."
'Wait a minute. So if it's 100 million yen, we have to pay the Merchant Guild 10 million yen just for the handling fee? That's like buying the bill at a fixed rate of 10%! Grandchester territory wouldn't just default on their payments!'
"Earlier, you said the handling fee is 10% of the received amount. Can we offset the promissory notes we hold?"
"Yeah, if both parties hold each other's promissory notes, we can offset them. And if it's a big transaction with a major merchant, we can even adjust the amount of the bill."
"If we offset the promissory notes and the actual received amount decreases, does the handling fee also decrease?"
"It does decrease, but the handling fee for offsetting is separate. It's 10 dallas per transaction."
'The handling fee is too high!'
"I understand now. So it's not like all the promissory notes will be cashed in at once. We have to act normally and not let them know about the crisis."
"Yeah, that's right."
"By the way, Uncle. You mentioned earlier that you're going to let go of the treasure, but I haven't confirmed the Grandchester family's treasure catalog in this office."
"That's because it's the Grandchester family's private property. It's been decided that only the head of the Grandchester family can manage it."
"Has the previous owner of that treasure not embezzled it?"
"Don't worry about that. The entire treasure vault is protected by magic, and only the head of the family or their authorized representative can enter. And if something unexpected happens and the head of the family can't exercise their rights, the royal family can appoint the next head to inherit it."
"I see. So that's how it works. I understand now."
"Well, if I read the letter, Father himself will come soon and grant me permission to sell some of the treasure, won't he?"
'I don't know what's inside, but nobody can guess, so it'd be good if we could sell a little of it to get us out of this predicament...'
Please bookmark this series and rate ☆☆☆☆☆ on here!
Donate me
Support Me with USDC
(ERC20)
Support Me with XLM
(Stellar Lumens)