When we trade, we exchange goods or services for money. The goods or service have a value, and we represent value with money. With simplified bookkeeping, if we receive the money at the same time as the goods or service, we get money with a value X. If we receive the money before delivering the goods or service, we get X+Y in money and if later we get X-Y in money. Alternatively, we could get the same amount of money and less or more goods and services. Y may depend on time and is independent of any other agreement.

Using this approach to bookkeeping simplifies accounting because it removes the time value of money. Removing the time value of money eliminates money markets as we know them today. The value of money tokens is zero as money is a way to exchange value, not a store of value. Money in the bank is savings and the savings have a value, not the money symbol.

Accounts across entities are tightly linked with transactions. Doing this further simplifies accounting because we agree on value, and it remains fixed. The amount of money transferred varies but as money is not a store of value the books are unaffected.

This approach eliminates most interest and money inflation as each agreement contains rules around the calculation of Y to account for them. With modern technology the calculation of Y is a small cost and is much less than the expense of markets, interest, complicated book-keeping and inflation. It will reduce the costs of operating a modern economy by at least 50%.

We can make the change to simplified bookkeeping transaction by transaction as a transaction using simplified bookkeeping is compatible with existing bookkeeping.

The first transaction made using simplified bookkeeping were the fees paid to my bookkeeper Tailored Accounting.

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