About Leapfin accounting records and links
- Ian Fondrk (Unlicensed)
- Mark McGuire (Unlicensed)
Table of contents
Overview
Accounting records are the foundation upon which nearly every process in Leapfin is built. Therefore, to understand Leapfin, you must first understand accounting records. This document explains the key concepts of accounting records, including the different types, how they link to one another, their functionality, how they are used to create accounting rules and generate journal entries, and how you leverage them for reporting.
What are accounting records?
The raw transactional data Leapfin ingests from your connected data sources is typically not optimized for accounting and often contains empty or unnecessary data fields. To make this raw data accountable, Leapfin performs data mapping to convert it into a standardized, reportable format known as accounting records.
Accounting records represent transaction types, such as invoices, payments, credits, and disputes. They provide a standard framework for organizing data to ensure consistency and accuracy in your accounting across your various integrations and transaction types, while also serving as the fundamental building blocks when creating accounting rules to generate journal entries.
The following illustration provides a high-level overview of the accounting record creation process:
As you can see above, although an accounting record is considered a single object (e.g., refund record), each record contains multiple data fields that identify transaction details, dates, amounts, and reference IDs.
The image below shows an example of a refund record in Leapfin, along with the data fields that make up the record:
Accounting record types
As mentioned above, accounting records are data objects that represent common transaction types. The following table lists each type of accounting record that can be created by Leapfin and provides a brief description of each. Click the linked record name for a detailed breakdown of that record type, including the standard and optional data fields that make up each.
Record type | Description |
|---|---|
Represents a legally binding agreement between two or more parties that outlines the terms for a specific transaction | |
Represents a financial transaction in which one party extends credit to another, allowing the recipient to make a purchase or obtain a service with the understanding that payment will be made at a later date. | |
Represents adjustments to an invoice issued by a merchant to a buyer, indicating that the seller is crediting back a certain amount to the buyer. | |
Represents a specific entry or line item within a credit note. | |
Represents a reduction in a product or service's original price or value. | |
Represents a disagreement between the customer and merchant on a particular payment. | |
Represents costs charged to a merchant by the payment service provider (PSP) for processing a transaction. | |
Representing the billing sent from the merchant to the customer. | |
Represents a specific entry or item from an invoice that provides details about a particular aspect of a business transaction. | |
Represents a cash payment to settle an invoice. | |
Represents fund transfers from a merchant's payment processor wallet to a destination account. Note: Settlements may also be called payouts or disbursements depending on the payment/billing service provider. | |
Represents follow-up actions that happen on other accounting records, such as line items, taxes, and fees. Common examples include gift card redemption, shipment of an e-commerce product, and subscription pauses. | |
Represents cash returns from a payment service provider to a customer for a processed payment. Note: In Leapfin, refund records refer to cash refunds only. When payments are refunded as credits, Leapfin creates an issuance credit record | |
Represents a financial charge or levy imposed by a government on individuals, businesses, or other entities to fund public expenditures and government operations. |
View your accounting records
You can view and filter your full list of accounting records on the Accounting Records page.
Once you locate a specific record, you can drill down into the data to see the data fields that make up the record, associated linked records, the journal entries generated from the record, and the history of the record.
The ACCOUNTING RECORD tab displays the standard and custom data fields that comprise the accounting record, as well as any associated linked records. Learn more >
The JOURNAL ENTRIES tab displays the journal entries generated from this record. Learn more >
The TRANSACTION HISTORY tab displays a detailed time-stamped history of the record, starting from the ingestion of the raw transactional data and including any applied rules, data changes, and journal entries. Learn more >
Accounting record graphs and links
Like the transactions they represent, accounting records are not independent; instead, they form relationships with other accounting records called links. For example, an invoice record may link to multiple line-item records. Each line-item record may be associated with a tax record. When the invoice is paid, a payment record is created and linked to that invoice record. If the payment is refunded, a refund record is created and linked to the invoice. By linking records, Leapfin can pull data points from any related records to produce complete and accurate journal entries.
When viewing an accounting record, you can see all records to which it is linked under the Links section of the ACCOUNTING RECORD tab.
The combination of accounting records and their links is called a graph. Graphs paint a picture of the entire transaction trail for a specific accounting scenario, allowing you to accurately account for financial impact within your accounting rules and reporting. The size of a single graph depends on the complexity of the accounting scenario. Graphs representing a simple scenario may only contain a few records, while graphs representing complex scenarios may contain many more. Depending on the size of your data set, your Leapfin database may contain millions of accounting record graphs.
The following illustration provides an overview of how graphs, records, and links relate to one another in the context of your Leapfin database:
Illustration key
Leapfin Database: The location where all accounting record graphs are stored. Depending on the size of your data set, your database may contain millions of graphs.
Graph: The combination of accounting records and their links. Depending on the complexity of the scenario it represents, a graph may contain a few records or hundreds.
Record: The individual accounting records that make up the graph.
Link: The relationship between individual accounting records within the graph.
Establishing links
All accounting record links are established using Dynamic Linking data enrichment rules, which can be managed under Data > Data Enrichment Rules. Dynamic Linking connects a source record to a target record to ensure complete and accurate accounting.
Within the data enrichment rules, links are created using a unique linking ID, which is generated using key data points from both the source and target records. This linking ID acts as the bridge between the source and target records, allowing the linking rule to apply to all existing and future records for which that logic exists.
There are two types of links created in Leapfin:
Linking type | Creator | Description |
|---|---|---|
Standard links | Leapfin | As part of implementing your standard integrations, Leapfin will automatically create Dynamic Linking rules for common linking scenarios, such as invoice to line item, line item to tax, and payment to invoice. Leapfin establishes these standard links for each standard integration, based on the natural order of accounting. Although these standard links are created for you automatically, you can view and edit them on the Data Enrichment page. |
Custom links | User | For edge cases that Leapfin’s standard linking does not cover, such as creating links for custom data sources, you can create custom Dynamic Linking rules via the Data Enrichment Rules page. These links are created and function identically to standard links; however, you will need to create them from scratch. Note: Custom links are not common, as most linking scenarios are covered by Leapfin’s standard Dynamic Linking rules. |
Using accounting records to build accounting rules
Accounting rules are the codification of your accounting policies in Leapfin. Each accounting rule accounts for a specific transaction scenario and automatically generates dynamic journal entries based on the rule parameters. Rule parameters are established using the individual data fields that make up your accounting records.
The illustration below provides an overview for creating a basic rule for immediate revenue recognition. In this example, a line item is set as the primary record for the rule, which allows us to specify that we want to generate journal entries based on the line item date, amount, and discount amount fields. In addition, a condition was added to only generate the journal entry if the line item is linked to an invoice with a paid status.
For detailed information on creating and managing accounting rules, please reference the following articles:
Query and report on accounting records and link data
Detailed data for accounting records and their links is stored in tables within your Leapfin data warehouse. You can use these tables to query and report on accounting records in both Snowflake and Advanced Reporting (if enabled).
Data type | Data table |
|---|---|
Individual accounting records |
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Accounting record links and graphs |
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For detailed information about your Leapfin data tables and how to use them to query and report on data, see the following articles: