Merits, Limitations and Present-day Relevance

Merits of the Deshi Nama system. The system's greatest strength is its simplicity. It is easy to understand and to keep even without formal training in accounting, which suits family firms and small traders. It is inexpensive — plain books and a pen are enough, with no need for printed stationery or specialised staff. It is written in the trader's own language, so the whole family can read and rely on it. And it gives the merchant a quick, direct grip on the two things that matter most day to day: how much cash is in hand, and the running balances with each party.

Limitations of the Deshi Nama system. The very simplicity that makes it convenient also limits it. There is no proper system of columnar (multi-column) books, which becomes awkward when a business deals in many different items. Supporting vouchers for dealings are not always systematically filed and cross-referenced into the ledger, so a full, independent audit trail is difficult to build. The absence of standard, uniform rules means the books differ from trader to trader. And because it does not readily produce the standardised financial statements and analysis that management needs, it is not well suited to decision-making in large modern business units. …