Double-entry accounting for software platforms
Why the 500-year-old accounting model is exactly right for a modern payments ledger.
Double-entry accounting records every movement of money as two equal, opposite entries: a debit to one account and a credit to another. The entries always sum to zero, so the books are self-checking — a transaction that doesn't balance is simply invalid.
Why software needs it
A platform moving other people's money must be able to answer, at any moment, exactly how much it holds and owes — and prove how a balance came to be. Single-entry "just track a number" breaks under returns, holds and reversals. Double-entry doesn't.
Holds, postings and available balance
A robust ledger distinguishes pending (a hold placed when a payment is created), posted (settled), and available (posted minus outstanding holds). That's how you avoid double-spending money that's already promised but hasn't left yet.
On DigitalTreasury
The ledger is balanced, append-only and denominated in integer cents — never floats. A hold posts at payment creation and converts to a settled entry on completion, so pending, posted and available always reconcile by construction.
What is an FBO account?
One bank account, many customers' money — held for their benefit and reconciled to the penny.
What is payment reconciliation?
Making your books and the bank agree — and why the best reconciliation is the kind you never run.
What are virtual accounts?
Give every customer their own account number on one real account — so inbound money self-attributes.