Table of contents
Highnote creates ledgers for your financial accounts based on your card product vertical. This guide overviews Highnote ledgers, ledger types and entries, and account balances.
Overview
Ledgers are found on an account holder's financial account page in the dashboard:
Additionally, card product balance ledgers are found on the Balance page of the dashboard.
Ledgers have the following attributes determined by the ledger category:
- Ledger name
- Description
- Normal balance
For example, a cash ledger in the assets category has a normal debit balance. To understand Highnote ledgers, you must first understand the following key concepts:
Concept | Description |
Financial event | Any event that impacts the balance of a financial account |
Ledger entry | A record of a financial event resulting in a change in a financial account's balance |
Normal balance |
The expected balance of a ledger; either credit or debit |
Account balance | The current balance of a ledger, reflecting all financial events |
Account balances show all financial accounts for a given ledger. When an individual financial event occurs, it results in a ledger entry. Each ledger entry reflects the change in account balance. The following steps break down this process using an example scenario:
- Funds are transferred from an external bank account into a Highnote financial account.
- The funds transfer results in a ledger entry in the financial account's cash ledger, reflecting the new account balance.
- When transactions are made using a payment card, the authorization ledger reflects pending authorizations and holds on the account.
- After transactions clear, the available cash ledger reflects the money available to spend in a financial account.
Ledger types
There are a variety of ledger types across the Highnote platform. Available ledgers differ depending on each card product and its features and settings. Typically, the following ledgers are available to view in the dashboard:
Ledger name | Description |
Available cash | Tracks money available for spend in a financial account |
Available credit | For credit card products, it tracks the available credit for spend in a financial account |
Cash | Tracks all money movement in a financial account |
Reserve | Tracks reserve funds for a financial account |
Ledger entries
Ledger entries are records made in a Highnote ledger that result from a financial event. Ledger entries result in a change in account balance.
There are two types of ledger entries:
Ledger entry | Description | Example |
Credit | A financial event where money is credited to a ledger | A direct deposit |
Debit | A financial event where money is deducted from a ledger | An authorization for a purchase |
Account balances
Note: Highnote receives refunds as authorizations, clearing events, or authorization and clear events. The Highnote ledger records a refund as the transaction type sent by the merchant. For example, if Highnote receives a refund as a clearing event, the financial account's ledger will reflect a "Clearing" transaction for the refund.
Account balances reflect the current balance of a ledger based on financial events using the following logic:
- A single positive number reflects the balance.
- The direction of the balance is noted, either debit or credit.
- The account's normal balance is indicated.
- If the account balance and normal balance agree, the balance is interpreted as positive.
- If the account balance and normal balance disagree, the balance is interpreted as negative.
The following example uses a cash ledger and outlines how account balances and normal balances are reflected:
- Cash ledgers have a normal balance of debit.
- If a cash ledger has a $1000 debit balance, the account balance is positive, and the cash ledger has $1000.
- If a cash ledger has a $1000 credit balance, the account balance is negative, and the cash ledger has -$1000.
Highnote's ledger system is based on accounting principles, with cash and activity represented independently. This means that account balances provide a snapshot of a time point rather than reflecting pending or available balances. Pending or available balances can be calculated across ledgers.