Key Concepts
Foundational concepts, terminology, and the double-entry model behind every Ledgers-aaS operation.
Introduction
This page is for product, operations, and engineering readers who need a shared vocabulary before working with Ledgers-aaS. It covers the mental model behind ledgers and the terms used across the API and dashboard.
How a ledger works
A ledger is a system of record. It holds ledger accounts, and each account holds a balance. Money moves between accounts through transactions, and every transaction is made up of one or more entries — each entry is either a debit or a credit.
The model is built on double-entry accounting: every transaction creates at least one debit and one matching credit. The two sides always sum to zero, which is what keeps the ledger balanced and auditable at every point in time.
Balances
Each ledger account exposes three balance views:
- Posted balance — the total of all finalized transactions on the account.
- Pending balance — transactions that have been initiated but not yet posted.
- Available balance — the amount currently usable, factoring in posted and certain pending transactions.
Reading the right balance for the right decision matters. Use available for authorization checks, posted for accounting and reporting, and pending to surface in-flight activity to end users.
Definition of terms
| Term | Definition |
|---|---|
| Ledger | A system of record that tracks all financial transactions, ensuring traceability, consistency, and auditability of balances across accounts. |
| Ledger ID | A unique identifier for a specific ledger, which records a complete set of financial transactions. |
| Ledger Account | An individual account within the ledger assigned to a user, merchant, or system entity — each tracking its balance via credits and debits. |
| Ledger Account ID | A unique identifier for an individual account within a ledger, used to track specific balances or transactions. |
| Transaction | A financial event that changes balances between ledger accounts by generating one or more accounting entries. |
| Entry | The building block of a transaction in the ledger — each represents a movement of value, either a debit or a credit. |
| Credit and Debit | Accounting operations applied to ledger accounts. Debits reduce balances in asset accounts and credits increase them, and vice versa for liabilities. |
| Double-entry | The principle that every transaction creates at least two entries — one debit and one credit — keeping the ledger balanced at all times. |
| Reversal | A transaction that negates a previously posted transaction, effectively undoing its financial impact on the ledger. |
| Posted balance | The total value of all finalized transactions recorded in the ledger account. |
| Pending balance | The sum of transactions that have been initiated but not yet posted. |
| Available balance | The amount currently accessible for use in the ledger account, factoring in posted and certain pending transactions. |
| Metadata | Additional data or tags attached to a ledger, account, or transaction to provide context or aid in categorization. |
Updated 7 days ago