GoKawiilOnce represented, money movements have to be recorded in a way that balances, survives audit and can be reconstructed years later. This is where the books, their timestamps and their history live.
Double-entry bookkeeping is a widely used way to store financial transactions as a list of entries in the form of (credit account, debit account, amount) (this is a compact form; the classic representation uses a separate debit and credit row per movement). Because every entry moves the same amount out of one account and into another, the books always balance - money is only moved, never created or destroyed.
Business and business-consumed reports usually care about value or settlement time, while booking time is useful for traceability.
Example: a card payment happened at T1 (value time), you recorded it at T2 (booking time), but the payment provider transferred money to your account at T3 (settlement time).
Transactions will usually have at least two, sometimes three timestamps associated:
Audits and audit trails
Financial systems are subject to regulatory scrutiny in the form of various audits. Some of the things that might be verified during an audit:
are company funds not commingled with user funds or used for company expenses?
are all revenues registered, reported and explainable? E.g. can you pinpoint the transactions that contributed to a particular revenue stream in a particular period?
is the information provided to the external world (e.g. users or the tax office) matching reality? E.g. does the company hold as much in assets as it owes its users?
... continue reading