Ledgers

Ledger Overview

Ledgers are the building blocks of account balances in the Highnote Platform. Transaction Events generate Journal Entries that in turn affect the ledger balances. Thus, Ledgers represent the impact of Transaction Events, like a card swipe or ACH receipt on various account balances. This can be used to create periodic statements or account snapshots. You can also use the ledgers to understand the balance and available balance of an account or the status of any fund movement or anticipated fund movement.

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For example, if you wanted to know the balance available to spend on an account you would look at the Available cash ledger balance. If you wanted to know how much of the reduction in available cash balance was from pending activity you wouldn’t have to do any calculations, you could just look at the Auth ledger balance.

Ledgers are created automatically with the creation of your Card Product based on the type. You won’t see all ledgers on a Financial Account, just the ones that impact that account’s balances, informing how the account can be used.

This guide will walk you through how to inspect your Ledger Balances and query activity across the Ledgers. At the end of this guide is an end-to-end example that will help you see how you can use ledgers to understand balances in an account.

Ledgers have a name, description, and a normalBalance determined by the Ledger category. For example, a CASH Ledger has a category of ASSETS and has a normal balance of debit. This normal balance is important in interpreting the balance of the Ledger in a meaningful way as ledger balances are represented as either debit or credit balances.

NameDescriptionSummaryNormal Balance
CashCashThis is the actual cash in an account or allocated to a cardDebit
Available CashAvailable CashCash Available to transact against the account: spend, transfer, advance, or repayCredit
ReserveReserveThe Reserve is an organization ledger. See your MSA for Reserve requirements on your account. These are funds held from available cash for emergency funding.Credit
[various] Receivable*** ReceivableReceivables are created on the originating account when funds are advanced from one account to another. There are several types of advances, in addition to a generic advance, that generate a corresponding receivable; e.g., overdraft receivable, provisional credit receivable Example: Overdraft Receivable, Provisional Credit Receivable, Advance Receivable, etc.Debit
[various] Payable*** PayablePayables are generated on accounts receiving any type of advance. They can be used to track repayment for various program use cases such as payroll advance or recouping a provisional credit. Example: Overdraft Payable, Advance PayableCredit
[various] Hold*** HoldHold ledgers are sometimes used by the Highnote Platform to review a transaction for regulatory or compliance reasons. This doesn’t mean anything is wrong simply that we are managing compliance and risks on your behalf. Example: deposit hold, refund hold, fundin hold, etc. (Deposit Hold represents holds on incoming deposit via a payment card, such deposit at an ATM. Refund Hold represents holds on refunds into a payment card. Fundin hold represents holds on fundin to a Financial Account, such as ACH and wire)Credit
AuthPayment Card AuthorizationsThe “Auth” ledger is all the currently pending events like a payment card authorization. When an authorization is received funds are deducted from the Available cash ledger and placed here to represent the pending obligation. These may be completed by clearing or reversed at some future date.Credit
RefundAuthPayment Card Refund AuthorizationsThis ledger is the pending refunds or returns against a card accountDebit
Deposit AuthPayment Card Deposit AuthorizationsThis ledger is the pending deposit against a card accountDebit
Fee AuthPayment Card Fee AuthorizationsThis ledger is the pending fee against a card accountCredit
AVAILABLE_CREDITAvailable CreditThe amount of credit available for the Account Holder to utilizeCredit
ACCOUNT_HOLDER_SECURED_DEPOSITSecured DepositThe deposit amount collateralized against the credit lineCredit
OUTSTANDING_BALANCE_PAYABLEOutstanding BalanceThe balance owed on the credit accountCredit
ACCOUNT_HOLDER_PAYMENT_RECEIVABLEPending PaymentThe Account Holder’s pending repayment towards their outstanding balanceDebit
ACCOUNT_HOLDER_PAYMENT_PAYABLEExternal Bank Account PaymentThe Account Holder’s initiated payment amount from an external bank account towards to their Financial AccountCredit
ACH_PENDING_SETTLEMENT_OUTExternal Bank Account Payment PendingThe Account Holder’s pending payment amount from an external bank accountCredit
ACH_PENDING_SETTLEMENTPayment PendingPending payment amount from an Account Holder’s external bank accountCredit
PENDING_PAYMENT_RECEIVABLEPayment PendingPayment amount expected to be received from Account Holder’s external bank accountDebit
CREDIT_OUTSTANDINGOutstanding Credit ExposureThe amount of un-utilized credit extended to Account HoldersDebit
OUTSTANDING_BALANCE_RECEIVABLEOutstanding BalanceThe amount of credit utilized by Account HoldersDebit
SECURED_DEPOSIT_PAYABLESecured Deposit PayableThe secured deposit amount expected to paid by Account HoldersCredit
SECURED_DEPOSIT_RECEIVABLESecured Deposit ReceivableThe secured deposit amount expected to be received from Account HoldersDebit
SECURED_DEPOSIT_COLLATERALSecured Deposit CollateralThe secured deposit amount received from Account HoldersCredit
REWARDS_POINTSRewards BalanceThe Account Holder’s reward point balanceDebit
REDEEMABLE_REWARDS_POINTSRewards Balance available for redemptionThe Account Holder’s reward point balance available for redemptionCredit

Balances are shown as debit or credit balances. If the balance of the Ledger and the normal balance agree, then the balance can be interpreted as positive. If the balance and the normal balance disagree then the balance may be negative.

Using the CASH example again. If the balance of a CASH Ledger is a debit balance (remember the normal balance for cash is debit) then the balance is positive - money in your account. If the balance of a CASH Ledger is a credit balance; then, the balance and the normal balance disagree and the credit balance represents a deficit or negative balance in the cash account.

All Ledgers for Your Organization

Because the ledger system is based on generally accepted accounting principles cash and activity are represented independently. Meaning, that the balance of an account is the balance for a point in time. There are no pending or available balances, this type of account-level information can be calculated across ledgers if desired.

You can list all the Ledgers for a particular Organization or financialAccount. These Ledgers are generated on entity creation for you and give you the information you need to track cash and activity throughout the Highnote Platform.

Balances are the result of credits and debits against a particular account. The balance of the account is the excess of either debits or credits on the account. The account balance is represented by a single positive number, the direction of the balance, either debit or credit (depending on the side of the account that has the excess balance), and the account's normal balance. Querying the Ledger returns these fields. The meaning of the balance can be derived depending on the perspective and the situation.

For example, a cash account balance of $1,000 with a direction of debit and a normal balance of debit represents a balance above zero in the cash ledger. A cash ledger balance of $1,000 with a direction of credit and a normal balance of debit represents a deficit or funds less than zero. In this case, meaning the account has gone negative.

Querying for Ledger Entries

Activity in a Ledger is a ledger entry. Two or more Ledger Entries that offset each other make up a Journal Entry. Every Journal Entry resulting from an event has two or more Ledger Entries in the form of debits (the left side) and credits (the right side). Alone, a Ledger Entry represents the impact of an event on a single Ledger. A Journal Entry is made up of two or more Ledger Entries that offset each other and represent the activity on the Ledger Journal or multiple accounts. The magic of the Ledger is that in any Journal Entry, the Ledger Entries MUST offset each other i.e., debits and credits must be equal.

Simulating a Wire Transfer

To make funds available to your Card Product you must transfer money from your bank accounts via a bank transfer. Highnote’s Platform will automatically reconcile the funds into your deposit account once we recognize the cash in your account, which happens once daily.

In our Test Environment, you will not be able to transfer real funds to your card product. Therefore, you should use the simulateWireTransfer mutation to add funds to your Organization.

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