Double Entry: How the Merchants of Venice Created Modern Finance. By Jane Gleeson-White. Allen & Unwin; 294 pages; £12.99. To be published in America in October by W.W. Norton. Buy from Amazon.co.uk

WHEN Luca Pacioli wrote his encyclopedia of mathematics at the end of the 15th century, the book contained pretty much everything known about maths at the time. Euclid’s ideas were gaining currency and the Arabic numbering system was spreading. The book had a relatively wide readership, as Pacioli wrote it in the vernacular and the recent invention of movable type meant that it was printed in an edition of some 2,000. A lengthy entry in this book explains for the first time a system of accounting called double-entry book-keeping. This innovation is at the centre of an entertaining and informative new book by Jane Gleeson-White.

Double-entry book-keeping is “one of the greatest advances in the history of business and commerce,” declares Ms Gleeson-White. She argues that this process of recording profit and loss helped spawn the empiricism of the Renaissance and enhanced the momentum of capitalism.

The method of putting debits on one side of a ledger and credits on the other enabled Venetian merchants to record their capital, separate it from income and determine the dividends intended for investors. The system had been developed in Venice 200 years before Pacioli—the “father” of book-keeping—first recorded it.

Pacioli was a student of Alberti, an Italian humanist and polymath, before he took holy orders and became a professor of mathematics at Perugia University. He grew interested in art, inspired by the mathematical analyses of perspective by Piero della Francesca, born like him in Sansepolcro in Tuscany. A friend of Leonardo da Vinci, Pacioli went on to write a manual about chess.

Ms Gleeson-White resuscitates Pacioli’s reputation as a fine specimen of Renaissance man. Near the end of the book, the author begins to lose her way with a scarcely relevant critique of the calculation of GNP. But she has already justified Pacioli’s most significant contribution to economic history. As a neat, transparent way of collecting information about a business and rewarding capital investment, double-entry book-keeping offered a soaring new sense of the bottom line.