Entendre’s data model consists of all primitives required to automate the reporting and bookkeeping for Web3 business activity.

An Organization is the top level object that represents a company, including its corporate structure. It stores global settings, user data, billing are stored at the organization level.

Admin users will have the access to update the properties of an Organization. This currently includes the following:

Furthermore, users can belong to more than one organization. This is relevant to users that manage the accounting of multiple organizations, like accounting firms or auditors.

A legal entity represents an organization's corporate structure. Each entity has its own sub-ledger, which includes a unique set of transactions, sources, balances, entries, and other specific objects like journal entry template lines or rule sets.

Each legal entity must have a default currency. All transactions, journals, financial reports, and currency-denominated values are displayed in this currency. For organizations with multiple entities, each legal entity may have a different currency. If balances or other values are aggregated across entities with different currencies, an error will occur without specifying a target reporting currency.

A ledger account, capable of being debited or credited by Journals, yields a balance for each accounting period. There are five types of ledger accounts: Income, Expense, Asset, Liability, and Equity. A ledger account type can be classified as either credit normal or debit normal. Income, Equity, and Liability accounts fall under the credit normal category, meaning that their balance increases with credits. Assets and Expense accounts fall under debit normal, meaning their balances increases with debits.

Root accounts serve as the initial ledger account for each type, and they can't have a parent. A ledger account may have a child account, and these child accounts can also have child accounts. Additionally, each ledger account is assigned a sequence number that must adhere to a sequential numbering scheme.

Notably, asset accounts can also function as "clearing" accounts, serving as pass-through accounts. This is relevant for entries that keep the net worth of Balance Sheet Accounts types unchanged in the ledger.

Sources are accounts capable of holding, sending, or receiving funds. Sources belonging to an organization are classified as internal sources. External sources refer to accounts that interact with an organization's internal sources through debits or credits. Internal sources can include wallets, exchanges, and other third-party integrations that allow transaction imports.

All internal sources should be linked to a specific legal entity. This link ensures that the entity's information is propagated throughout the system in transactions, entries, and balances. Each internal source can be associated with only one legal entity and can import transactions based on a custom look-back period. Once an internal source is linked to a specific legal entity, it can't be linked again to the same or a different entity.

Every source type needs to have an alias, specified chain(s), and an address. Tags are optional objects that can be added to group sources together. They simplify conditions within ledger posting rules and assist with filtering.

Operational Transactions are records imported from internal sources. These transactions will have metadata pertaining to the transaction itself and relationship to other objects such as the source and legal entity it belongs to. When an operational transaction is accounted it for it will have an associated journal entry attached to it.

Transactions may require adjustments before accounting. A transaction could be flagged as spam, have its cost basis or category updated, or have its external address saved as an external source. These actions can also be done in bulk by specifying which transactions should receive the adjustments.

Transactions have the following categories:

Journals correspond to each accounting transaction associated with operational transactions. Each journal possesses entry lines, derived either from a Journal Entry Template or a manual entry. These entry lines debit and credit specific ledger accounts, updating the balance for the journal's Accounting Period. Notably, a journal doesn't always require an operational transaction. For instance, when an Impairment Rule is run, the resulting journals lack an operational transaction because they record changes to the cost basis of Asset Records.

Journal have specific status that can allow for updates to balances:

Unposting is typically done to correct errors or make adjustments to an entry. For example, if a mistake was made in a journal entry (e.g., an incorrect amount was recorded), you would unpost the entry to correct the error.

After unposting a journal entry, you can make the necessary corrections and then repost the corrected entry to the general ledger.

When you reverse a journal entry, you create a new journal entry that is the exact opposite (in terms of debits and credits) of the original entry. This effectively cancels out the original entry in the current period.

For a journal entry to be balanced, it must adhere to the fundamental principles of double-entry accounting. In double-entry accounting, every transaction affects at least two accounts, and the total debits must equal the total credits. Below are the key requirements for balanced entries.

Journal entry templates are predefined entries that use dynamic variables to fill in the values of a real journal entry at the time of creation. These variables can be used for template memos and journal entry template lines. The following are the current journal entry line variables that can be used in the amount field: Gross Amount: This refers to the gross value of the transaction.

A ruleset is a collection of Ledger Posting Rule or Impairment Rule. It contains rules that a user configures using Conditions to identify matches. A match occurs when all conditions for a rule are satisfied before and after an "and" operator or if all conditions after an "or" operator are met. Each ruleset must have a name and a legal entity assigned to it.

Rulesets can be run either on a recurring schedule or on an ad-hoc basis. When a ruleset is scheduled, it processes transactions without any accounting from the time it last ran (either manually or scheduled) until the current run. Ad-hoc runs can either overwrite previous matches, if specified by the user, or filter for transactions that lack accounting.

A transaction may lack accounting if it had no matches or if a ruleset with a match hasn't run yet. Once a match is found, the accounting will be provided by the journal entry template associated with the rule.

A ledger posting rule handles transaction processing for matches. Each rule consists of a name, a journal entry template, and conditions. When these conditions are fulfilled, the template is used to generate a journal entry with accurate dynamic values derived from template variables. Rules can be moved to different rulesets or duplicated for expedited configuration.

Conditions are the most customizable part of both ledger posting and impairment rules. Their purpose is to create journal entries on behalf of users. Depending on the type, different condition options can be chosen.

Here are the conditions applicable to ledger posting rules:

Impairment rules process Asset Records instead of operational transactions. When asset records are found as matches to an impairment rule, the corresponding journal entry template is used to record a journal. What’s unique about impairment journal entries are that they must use the template line variable that calculates gain loss. These variables are impairment amount, gain loss (absolute value) and gain loss (+/-).

Additionally, there are specific conditions only available for impairment rules because they are related to attributes found on the asset records being impaired.

Impairment rules can be ran ad-hoc or scheduled.

Asset records are established when asset ledger accounts are debited. This process tracks the cost basis of each token on the balance sheet by legal entity, ledger account, and creation date. Asset records can be impaired or market-valued using impairment rules, but the original cost basis is always preserved. A new cost basis is then used for future calculations. Manual asset records can be established before the organization's first accounting period to initiate asset ledger account balances based on previous financials.

Asset records are managed in a queue. When new journal lines debit asset accounts, asset records are created and placed in the queue. When asset ledger accounts are credited, the first asset record in the queue for that particular token is dequeued for the quantity of tokens in the transaction token amount. If an asset record's quantity is reduced to zero, the next available asset record is then removed. This follows the "FIFO" (First-In-First-Out) method of determining which asset record to use to calculate gains and losses. Other methods include LIFO (Last-In-First-Out) and a tax-optimized method which prioritizes asset records with non-zero quantities that have the highest cost-basis.

However, the FIFO method has limitations. If journals are created out of sequence by transaction date, it will remove assets that were generated on different dates. This requires users to set up all desired automations in advance and execute them by period before moving on to the next period. If wallets are imported at a later date, users will need to clear their account and then account for the new wallet's transactions in sequence. This can also slow down the ability to create journals simultaneously, affecting performance.

Supported cost basis methodologies are as follows:

Tags are used to customize filters on reports, create more flexible ledger posting rules, and enhance 3rd party integrations with added metadata. Each tag has a key value pair and keys are currently predetermined by Entendre. They are:

Tags can be added to sources, template lines, journal lines, and conditions. For tables with data that show balances, journal lines, sources, tags can be used to filter within Entendre.

A balance object represents the total of all debit and credit entries in a journal for a specific ledger account and Accounting Period pair. For asset, liability, and equity accounts, the starting balance can be non-zero. This is based on records from previous periods or pre-period asset records, as these types of accounts appear on the balance sheet, which is cumulative. The balances of income and expense accounts reset to zero at the beginning of each period. Once an accounting period closes, the balances are finalized. If they are cumulative, these balances become the starting point for the next period.

Accounting periods denote the fiscal dates of months, quarters, or years. They have a status of either open or closed, and can only be closed once all operational transactions have been accounted for. During the closure of an accounting period any final processes that require journal entries will be prompted to the user. Once the status is changed to closed, no further changes can be made to entries or balances for that period. If there is a mistake in the journals of a closed period, the journal can be reversed and a new entry can be made in the current period. This will alter the balance in future financial statements. Additionally, when periods are closed they can integrate journals into the other accounting systems that have been connected.

Users are members of an organization. A user can belong to multiple organizations. When a user is added by an Admin they must accept the organization invite via email, even if they’ve done it for another organization in the past.

The roles for users are as follows:

Access to invite users will be available to Admins only in their Organization settings > Team page.