The building blocks

Walk into a library and the structure is obvious before anyone explains it. There is the library itself, the catalog that organizes everything, and the shelves. There is also what sits on each shelf right now, and the kind of thing a shelf holds. A core banking system has five pieces that line up the same way. You only need to see how each one rests on the one before it.

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They stack in order

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Each block depends on the one above it: a shelf sits in a library, a balance sits in an account. Here they are, top to bottom.

• Organization: your company, the outer boundary of everything you run. The library building itself. All your records live inside it and belong to it.
• Ledger: one self-contained book of records. The catalog. You can keep more than one, say one per business line or per region. Each ledger keeps its own independent, balanced set of books.
• Asset: the kind of value you track, such as a currency like USD, loyalty points, or anything countable. The category of thing on a shelf. The system tracks the unit separately from the amount, so it knows that 100 of one thing isn’t 100 of another.
• Account: a container tied to one asset. A non-external account can have one or more keyed balance records. An external account has exactly one default balance. A single shelf. Every movement of money has accounts on both sides.
• Balance: one keyed record of the amount an account holds, including available and held amounts. Each balance record has its own sending and receiving settings. What sits on the shelf at this moment.

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A balance is a result, not a setting

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A balance is the result of every movement into and out of the account, added up. You do not type it in or adjust it by hand. Money arrives, money leaves, and the balance is where that leaves you. This is why the books stay trustworthy: you cannot edit a balance directly. Recorded movements with two sides each move it into the shape it has.

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Next steps

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