Overview

Inter-party clearing

When one client's expense is paid from an account holding another client's money, the ledger records the obligation here rather than quietly letting the pools drift. Settling one posts the transfer it promised.

Open obligations

Rs 0.00

0 records across 0 client pairs

Unfunded

0.00

The owing client holds no liquidity anywhere

Closed

Settled or voided, kept for audit

Open records

Each row is one automatic balancing entry the engine posted, and the movement that will close it.

Every pool is square

No client has spent from another client's account, so there is nothing to clear. This is the state you want to be in.

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How the auto-ledger balancing works

The worked example from the specification, exactly as the engine executes it.

Starting state

Cash pool — Client A: 10,000.00
Bank A pool — Client B: 300,000.00
Bank B pool — unallocated: 100,000.00

An expense of 10,000 is paid out of Cash for Client B.

What the engine posts

1Expense entry: debit the expense head, credit Cash — both tagged to Client B. Physical cash falls to zero.
2Client B's pool in Cash is now −10,000, which is the signal. The engine reclassifies the ownership claim — debit Cash for B, credit Cash for A — on the same account, so the physical balance never moves.
3The inter-entity liability is recorded in the clearing memorandum account, and a record is written: 10,000 from Bank A is committed to restore Client A's Cash pool.
4Settling it moves 10,000 from Bank A into Cash and hands the claim back to Client A. Client A ends whole, Client B ends 10,000 lighter, and every balance is exact.

Clearing is for both parties: it never changes what a client is worth, only where that value sits. That is the arithmetic proof the engine neither creates nor destroys value — and it is why the closing balance on a client statement is unaffected by any automatic entry.

Ledger integrity

Re-derive every invariant from the underlying entries. Also available from the command line as `npm run db:verify`, which is what a cron job should call.

INV-1The ledger nets to zero overall
INV-2Every transaction balances on its own
INV-3Each account's balance equals the sum of its client pools
INV-4No client pool is negative unless the account itself is overdrawn
INV-5The clearing memorandum account totals exactly zero
INV-6Each client's memo balance matches the clearing register

The clearing register is reconciled against the ledger itself: each client's balance in the memorandum account must equal their outstanding position in this register. That is invariant INV-6, checked by the integrity panel above.