> ## Documentation Index
> Fetch the complete documentation index at: https://rain-sandbox-trial.mintlify.site/llms.txt
> Use this file to discover all available pages before exploring further.

# Ledgering System

> Understand how Rain tracks financial movements using double-entry accounting with balanced ledger entries across accounts and books.

## Overview

Rain handles off-chain ledgering using the same fundamental approach banks and accounting systems have used for centuries. Every financial movement creates balanced entries that always sum to zero: what goes out of one account goes into another.

## Structure

Rain's ledger is organized into three layers:

1. **Accounts:** Each user or company has an account. System accounts also exist for operations like Treasury and Issuing Processor functions.

2. **Books:** Each account has multiple books that track different types of money movement:
   * **Card Pending:** Funds on hold from card authorizations that have not yet settled
   * **Card Posted:** Final, settled transactions (details in the [`transaction.completed`](/docs/transaction#spend-3) webhook)
   * **Fees:** Platform fees charged to the customer
   * **Due:** What the customer owes or is owed

3. **Journal Entries:** Every transaction creates a journal entry with at least two book entries that balance each other out.

## Transaction Flows

### Customer deposits funds

When a customer deposits \$500:

* Their Due book decreases by \$500 (they owe less)
* The Treasury account increases by \$500
* **Result:** Available balance increases by \$500

### Card authorization

When a customer authorizes a \$100 purchase:

* \$100 goes into the customer's Pending book as a hold
* The payment processor's authorization book records the same \$100
* **Result:** Available balance decreases by \$100 immediately, even though the transaction has not settled

### Card transaction settles

When the \$100 transaction settles:

* The \$100 hold is released from the Pending book
* \$100 moves to the Posted book (now final)
* The payment processor's cash book is updated
* **Result:** Available balance stays the same: funds moved from pending to posted

You will receive a [`transaction.completed`](/docs/transaction#spend-3) webhook when settlement occurs.

### Fees charged

When a \$5 fee is charged:

* The customer's Fees Posted book records \$5
* The Treasury receives \$5
* **Result:** Available balance decreases by \$5

## Key Principles

1. **Everything balances:** Every debit has an equal credit elsewhere. The system does not allow entries that do not sum to zero.

2. **Pending vs. Posted matters:** Authorizations immediately reduce available balance (pending), then settle into posted transactions. This prevents overspending.

3. **Full audit trail:** Every entry records exactly when it happened and why, with snapshots of balances at that moment in time.

4. **Atomic transactions:** All entries for a single financial event are created together or not at all. There are no partial updates that could leave things unbalanced.

## Balance Calculation

A customer's **available balance** is essentially:

<Tip>
  Total funds deposited minus pending holds minus posted charges minus fees minus amounts owed.
</Tip>

The system adds up all the relevant books to show what's available to spend at any moment.