General Ledger Overview

What is the General Ledger?

The general ledger is Agatabo’s core accounting system that tracks all financial transactions using double-entry bookkeeping. Every deposit, loan disbursement, payment, expense, dividend, and reserve allocation creates journal entries that automatically maintain balanced accounts.

Automatic accounting: Most journal entries are created automatically when you perform business operations. You record transactions (deposits, loans, expenses), and Agatabo handles the accounting behind the scenes.

Key Concepts

Double-Entry Bookkeeping

Every transaction affects at least two accounts:

Debit side: Increases assets/expenses, decreases liabilities/income/equity
Credit side: Increases liabilities/income/equity, decreases assets/expenses
Balance requirement: Total debits must always equal total credits

Example:

Member deposits 100,000 RWF to savings:
  DEBIT: Cash +100,000 RWF (asset increases)
  CREDIT: Member Savings +100,000 RWF (liability increases)

Learn double-entry basics →

Journal Entries

A journal entry is a record of a financial transaction consisting of:

Kind: Type of transaction (e.g., SAVINGS_DEPOSIT, LOAN_DISBURSEMENT, DIVIDEND_DISTRIBUTION)
Transaction date: When the transaction occurred
Status: DRAFT or POSTED
Lines: Debit and credit lines that must balance
Metadata: Title, description, documents, idempotency key
References: Links to specific entities (organizationUser, loan, reserve, etc.)

Journal entry structure:

{
  id: string,
  kind: journal_entry_kind,
  transactionDate: Date,
  status: 'DRAFT' | 'POSTED',
  title: string | null,
  description: string | null,
  idempotencyKey: string | null,
  lines: [
    {
      side: 'DEBIT' | 'CREDIT',
      amount: Decimal,
      ledgerAccount: {
        id: string,
        role: string,
        type: 'ASSET' | 'LIABILITY' | 'EQUITY' | 'INCOME' | 'EXPENSE',
        name: string,
        scopeKey: string
      }
    },
    ...
  ]
}

Journal Entry Kinds

Agatabo supports the following transaction types: Savings & Deposits:

SAVINGS_DEPOSIT: Member deposits funds to savings account
ENTRY_FEE: Initial membership fee payment

Loans:

LOAN_DISBURSEMENT: Loan principal disbursed to member
LOAN_PAYMENT: Member makes loan payment (principal + interest)
LOAN_PENALTY: Late payment penalty applied
LOAN_DEFAULT: Loan written off as bad debt
INTEREST_PAID_IN_ADVANCE: Upfront interest payment

Expenses:

EXPENSE_PAYMENT: Operating expense payment
BANK_CHARGE: Bank fees and charges

Reserves:

RESERVE_TOP_UP: Allocate funds from retained earnings to reserves
RESERVE_RELEASE: Release funds from reserves back to retained earnings
RESERVE_EXPENSE: Expense paid directly from reserve funds

Dividends:

DIVIDEND_DISTRIBUTION: Distribute retained earnings to member savings accounts

Fixed Assets:

ASSET_CASH_PURCHASE: Purchase asset with cash
ASSET_COLLATERAL: Acquire asset as loan collateral
ASSET_GIFT: Receive donated asset
ASSET_DISPOSAL: Sell or dispose of asset
CASH_OPENING: Opening cash balance

Administrative:

REVERSAL: Reverse a previous journal entry
PERIOD_CLOSE: Close accounting period and transfer net income to retained earnings

Journal Entry Status

DRAFT:

Entry created but not yet finalized
Can be edited or deleted
Does not affect account balances
Not included in financial reports
Used for preparing entries before posting

POSTED:

Entry finalized and locked
Cannot be edited or deleted (permanent)
Affects account balances immediately
Included in all financial reports
Creates audit trail

Status transition:

DRAFT → POSTED (one-way, irreversible)

Most entries are POSTED automatically: When you record a transaction (deposit, loan payment, dividend distribution), Agatabo creates and posts the journal entry immediately. Manual entries can be created as drafts for review before posting.

Ledger Accounts

Ledger accounts are categorized by type and role. Account types (5 categories):

ASSET: Resources owned (Cash, Loans Receivable, Fixed Assets)
LIABILITY: Obligations owed (Member Savings, Borrower Surplus)
EQUITY: Retained Earnings, Reserves, Opening Equity
INCOME: Revenue sources (Interest, Fees, Penalties)
EXPENSE: Costs incurred (Operating Expenses, Bad Debt, Bank Charges)

Account roles (specific purposes): Assets:

CASH: Cash on hand or in bank
LOAN_RECEIVABLE: Principal amount of loans outstanding
INTEREST_RECEIVABLE: Accrued interest not yet paid
PENALTY_RECEIVABLE: Accrued penalties not yet paid
FIXED_ASSET: Equipment, furniture, buildings

Liabilities:

SAVINGS: Member savings balances (one account per member)
BORROWER_SURPLUS_LIABILITY: Overpayments from borrowers

Equity:

RETAINED_EARNINGS: Accumulated profits
RESERVE_ALLOCATION: Designated reserves (one account per reserve)
OPENING_EQUITY: Initial capital
OTHER_EQUITY: Miscellaneous equity

Income:

INTEREST_INCOME: Interest earned on loans
PENALTY_INCOME: Late payment penalties
ENTRY_FEE_INCOME: Membership fees
DISBURSEMENT_FEE_INCOME: Loan processing fees
BAD_DEBT_RECOVERY_INCOME: Recovered bad debt
OTHER_INCOME: Miscellaneous income

Expenses:

OPERATING_EXPENSE: General operating costs
BANK_CHARGE_EXPENSE: Bank fees
BAD_DEBT_EXPENSE: Loan write-offs

View all ledger roles →

Scope Keys

Scope keys link ledger accounts to specific entities. Format:

{entity_type}:{entity_id}

Examples:

organizationUser:abc-123  → Member's SAVINGS account
reserve:xyz-789           → Specific reserve's RESERVE_ALLOCATION account
loan:def-456              → Specific loan's LOAN_RECEIVABLE account
organization:org-001      → Organization-wide CASH account

Purpose:

Allows multiple accounts with same role (e.g., one SAVINGS account per member)
Links accounts to specific members, loans, reserves, or organization
Enables querying all accounts for a specific entity
Supports per-member, per-loan, per-reserve accounting

Scope patterns:

Organization-scoped: organization:{orgId} (CASH, RETAINED_EARNINGS, INTEREST_INCOME, etc.)
Member-scoped: organizationUser:{userId} (SAVINGS)
Loan-scoped: loan:{loanId} (LOAN_RECEIVABLE, INTEREST_RECEIVABLE, PENALTY_RECEIVABLE)
Reserve-scoped: reserve:{reserveId} (RESERVE_ALLOCATION)
Asset-scoped: fixedAsset:{assetId} (FIXED_ASSET)

How Transactions Create Journal Entries

Example 1: Member Deposits 500,000 RWF

Transaction: Member Alice deposits 500,000 RWF to her savings account Journal entry created:

Kind: SAVINGS_DEPOSIT
Status: POSTED
Transaction Date: 2026-06-12

Lines:
  DEBIT: Cash (organization:org123) +500,000 RWF
  CREDIT: Savings (organizationUser:alice123) +500,000 RWF

Result:

Cash balance increases by 500,000
Alice’s savings balance increases by 500,000
Entry is balanced (debit = credit)

Example 2: Loan Disbursed 2,000,000 RWF

Transaction: Member Bob receives a 2,000,000 RWF loan Journal entry created:

Kind: LOAN_DISBURSEMENT
Status: POSTED
Transaction Date: 2026-06-12

Lines:
  DEBIT: Loan Receivable (loan:bob-loan-123) +2,000,000 RWF
  CREDIT: Cash (organization:org123) -2,000,000 RWF

Result:

Loan receivable increases by 2,000,000 (asset)
Cash decreases by 2,000,000
Loan balance tracked in dedicated account

Example 3: Dividend Distribution 5,000,000 RWF

Transaction: Distribute 5,000,000 RWF dividend to 50 members Journal entry created:

Kind: DIVIDEND_DISTRIBUTION
Status: POSTED
Transaction Date: 2026-06-12

Lines:
  DEBIT: Retained Earnings (organization:org123) -5,000,000 RWF
  CREDIT: Savings (organizationUser:alice) +100,000 RWF
  CREDIT: Savings (organizationUser:bob) +100,000 RWF
  CREDIT: Savings (organizationUser:carol) +100,000 RWF
  ... (50 members total)

Result:

Retained earnings decreases by 5,000,000
Each member’s savings increases by their dividend share
One journal entry with multiple credit lines

Example 4: Reserve Allocation 1,000,000 RWF

Transaction: Allocate 1,000,000 RWF from retained earnings to emergency fund reserve Journal entry created:

Kind: RESERVE_TOP_UP
Status: POSTED
Transaction Date: 2026-06-12

Lines:
  DEBIT: Reserve Allocation (reserve:emergency-fund) +1,000,000 RWF
  CREDIT: Retained Earnings (organization:org123) -1,000,000 RWF

Result:

Emergency fund reserve balance increases by 1,000,000
Retained earnings decreases by 1,000,000
Both are equity accounts (internal transfer within equity section)

Viewing Journal Entries

Navigate to General Ledger

Click General Ledger → Journal Entries in sidebar

Filter entries

Filter by kind, date range, status, or search

View entry details

Click on entry to see all lines and metadata

Export or audit

Use for audit trail, reconciliation, or reporting

Learn how to view journal entries →

Creating Manual Journal Entries

Most journal entries are automatic, but you can create manual entries for:

Adjustments and corrections
Accruals and deferrals
One-time transactions not supported by standard features
Testing or data migration

Manual entries require accounting knowledge: Ensure you understand double-entry accounting before creating manual journal entries. Incorrect entries can make your books unbalanced.

Learn how to create manual entries →

Accounting Period Constraints

Journal entries are subject to accounting period rules: Rules:

Cannot post entries with transaction date in a closed accounting period
Transaction date must be in an open period
Once a period is closed, all entries with dates in that period are locked
Prevents backdating transactions or altering historical records

Example:

Closed periods: Jan 1 - Mar 31, 2026
Current open period: Apr 1 - Jun 30, 2026

Valid transaction dates: Apr 1, 2026 or later
Invalid: Mar 31, 2026 or earlier (period closed)

Learn about accounting periods →

Idempotency

Journal entries support idempotency to prevent duplicate transactions: How it works:

Supply an idempotencyKey when creating a journal entry
If same key used twice, second request returns the existing entry (no duplicate)
Safe to retry failed requests without creating duplicates

Example:

POST /journal-entries
Headers:
  x-idempotency-key: unique-key-123

If network fails and request is retried with same key:
  → Returns existing entry created by first request
  → No duplicate entry created

Use cases:

Dividend distributions (prevent double-distribution)
Reserve allocations
Bulk operations
API retries after network failures

Best Practices

General ledger best practices:For Non-Accountants:

Trust the automatic journal entries (they’re correct)
Review journal entries periodically to understand cash flow
Don’t create manual entries unless necessary
Ask an accountant if unsure about manual entries
Use trial balance to verify books balance

For Accountants:

Review journal entries regularly for accuracy
Use manual entries sparingly (only when necessary)
Always document manual entries with clear descriptions
Verify trial balance before closing accounting periods
Export journal entries for external audit
Monitor for unbalanced entries (should never occur)

Audit Trail:

All journal entries are permanent once posted
Cannot delete or modify posted entries
Use REVERSAL entries to correct mistakes
Keep idempotency keys for distributed operations
Document reasons for manual adjustments

Reconciliation:

Run trial balance monthly
Reconcile bank accounts with CASH ledger account
Verify member savings balances match SAVINGS account totals
Check that loans outstanding match LOAN_RECEIVABLE total
Investigate any discrepancies immediately

Common Operations

Understanding Double-Entry

Accounting basics for non-accountants

Ledger Roles

Complete list of account roles and types

Viewing Journal Entries

Review transaction records and audit trail

Manual Journal Entries

Create manual accounting adjustments

Reconciliation

Detect and resolve accounting discrepancies

For Different User Types

For Non-Accountants (Treasurers, Administrators)

What you need to know:

Journal entries are created automatically when you record transactions
You don’t need to understand debits/credits for day-to-day operations
Review journal entries to understand where money is going
Use reports (Balance Sheet, Income Statement) instead of raw journal entries
Trust the system to handle accounting correctly

When to involve an accountant:

Before creating manual journal entries
When reconciling discrepancies
Before closing accounting periods
For audit preparation
When interpreting complex transactions

For Accountants

What you need to know:

System uses proper double-entry accounting throughout
All automatic entries are balanced and validated
Journal entry kinds map to specific business transactions
Scope keys enable per-entity accounting (member, loan, reserve)
All entries should always balance (report issues if not)
Manual entries available for adjustments and corrections
Export capabilities for external audit

Key responsibilities:

Review ledger accounts before period close
Verify reconciliation regularly
Create manual entries when needed (with documentation)
Prepare financial statements
Audit journal entries for accuracy
Train non-accounting staff on basic concepts

Balance Sheet

View assets, liabilities, and equity

Income Statement

View revenue and expenses

Accounting Periods

Understand period closure and constraints

Retained Earnings

How profits accumulate in equity

​What is the General Ledger?

​Key Concepts

​Double-Entry Bookkeeping

​Journal Entries

​Journal Entry Kinds

​Journal Entry Status

​Ledger Accounts

​Scope Keys

​How Transactions Create Journal Entries

​Example 1: Member Deposits 500,000 RWF

​Example 2: Loan Disbursed 2,000,000 RWF

​Example 3: Dividend Distribution 5,000,000 RWF

​Example 4: Reserve Allocation 1,000,000 RWF

​Viewing Journal Entries

​Creating Manual Journal Entries

​Accounting Period Constraints

​Idempotency

​Best Practices

​Common Operations

Understanding Double-Entry

Ledger Roles

Viewing Journal Entries

Manual Journal Entries

Reconciliation

​For Different User Types

​For Non-Accountants (Treasurers, Administrators)

​For Accountants

​Related Topics

Balance Sheet

Income Statement

Accounting Periods

Retained Earnings

What is the General Ledger?

Key Concepts

Double-Entry Bookkeeping

Journal Entries

Journal Entry Kinds

Journal Entry Status

Ledger Accounts

Scope Keys

How Transactions Create Journal Entries

Example 1: Member Deposits 500,000 RWF

Example 2: Loan Disbursed 2,000,000 RWF

Example 3: Dividend Distribution 5,000,000 RWF

Example 4: Reserve Allocation 1,000,000 RWF

Viewing Journal Entries

Creating Manual Journal Entries

Accounting Period Constraints

Idempotency

Best Practices

Common Operations

For Different User Types

For Non-Accountants (Treasurers, Administrators)

For Accountants

Related Topics