Most of the comments here echo what the article is criticising. I can see countless threads of back-and-forth defending single-entry bookkeeping.
Sure, single-entry bookkeeping might be easier and more normalized, but sometimes it is a good idea to just stick with the systems and abstractions that have been developed over centuries.
Just use double-entry bookkeeping unless you definitely need something else. Sure, it might be icky for the programmer inside you, but I think you'll be thankful if you ever need to get actual accountants involved to sort out a mismatch.
On a related note: does anybody know of any good resources for programmers in payments and adjacent fields? Something like an "Accounting for Programmers"?
I read an article from Modern Treasury that advocated for mutable pending transactions to vary entry amounts by replacing entries¹, which is just about the worst idea I ever heard in the design of a DE system, and their reasoning boiled down to: if you're running a settlement system but are too lazy to implement a clearinghouse layer separately, no worries, just violate the entire DE covenant instead. So I'd take anything they write with a pinch of salt.
Out of curiosity, how would a clearinghouse layer plug into this in practice? Thinking aloud, would you have an event stream of, say, EntryCreatedEvent, and the clearinghouse would provide streams of of EntryClearedEvent and EntryRejectedEvent - would you join those streams together to derive EffectiveEntry, EffectiveTransaction, PendingEntry, PendingTransaction based on whether all clearing is done on both sides?
I would strongly advise against additional event types because the double-entry model is already an append-only journal. At most, I’d encapsulate the creation of a transaction as a structural formality for whatever event stream/bus is in use. The clearance events produced by the clearinghouse need to be more purposeful and work at a domain level for the logic to have any chance of coherent implementation. So it’s a PaymentsCleared event, note the plural because in many systems this is a batch. This is probably followed by events for the creation of records for the aggregate settlement transfers and their subsequent approvals/lodgement/lifecycle with financial institutions/treasury systems.
The most interesting projections from such an event stream are usually just Balance and PendingBalance. I wouldn’t type entries based on status, it’s just a flag (or more likely a timestamp and reason code), and transaction is not distinguished at all, its status is nominally cleared simply when all the linked entries are cleared.
I consider that first link, Accounting for Computer Scientists, as the canonical guide for computer scientists as to wtf double entry accounting is and why it's the right way to do it.
> On a related note: does anybody know of any good resources for programmers in payments and adjacent fields? Something like an "Accounting for Programmers"?
Get a grip on the accounting basics first. I built my own bookkeeping system with double entries and realized the design and the programming was the easy part.
Sure, single-entry bookkeeping might be easier and more normalized, but sometimes it is a good idea to just stick with the systems and abstractions that have been developed over centuries.
Just use double-entry bookkeeping unless you definitely need something else. Sure, it might be icky for the programmer inside you, but I think you'll be thankful if you ever need to get actual accountants involved to sort out a mismatch.
On a related note: does anybody know of any good resources for programmers in payments and adjacent fields? Something like an "Accounting for Programmers"?