Double-Entry Bookkeeping¶

SWEN records every transaction using double-entry bookkeeping — the same system banks, businesses, and accountants have used for 500 years. In this section we try to explain the basics that can help a personal user.

The Core Rule¶

Every financial event has two equal and opposite sides:

\[ \sum \text{Debits} = \sum \text{Credits} \]

Money does not appear or disappear — it moves from one account to another. This makes errors self-revealing: if the books don't balance, something is wrong.

Account Types¶

SWEN uses the standard five account types:

Type	Tracks	Increases with	Decreases with	Example
Asset	What you own	Debit	Credit	Checking account, savings
Liability	What you owe	Credit	Debit	Credit card balance
Equity	Net worth	Credit	Debit	Opening balance account
Income	Money earned	Credit	Debit	Salary, interest
Expense	Money spent	Debit	Credit	Groceries, rent

A note on Equity Accounts in SWEN

When first synchronizing bank accounts, SWEN has to create an opening balance that virtually stands for the bank account balance at the day of the first imported transaction. This means, the bank account balance matches SWEN's account asset balance.

A Worked Example¶

You pay €7.80 at Starbucks (if you can drink that 'coffee'). Your bank account (Asset) decreases; your Restaurants & Bars expense account increases.

Account	Debit	Credit
Restaurants & Bars (Expense)	€7.80
Checking Account (Asset)		7.80
Total	€7.80	€7.80

In SWEN this looks like:

Transaction detail

SWEN's Account Hierarchy¶

In the UI, the accounts are grouped under their respective types.

Chart of accounts

BankAccount vs Account¶

These two terms are often confused:

Term	What it is	Example
`BankAccount`	Your actual bank account with an IBAN	`DE12 3456 7890 0000 1234 56`
`Account`	A bookkeeping ledger account	`Groceries (Expense)`

A BankAccount is always linked to exactly one Account of type Asset. When you import a bank statement, raw BankTransaction records are created. SWEN then creates a double-entry Transaction (journal entry) that posts the movement between the Asset account (your bank) and the appropriate counter-account (e.g. Groceries). The raw BankTransaction is also persisted in the database.

Draft vs Posted Transactions¶

State	Meaning
Draft	ML has suggested a counter-account; awaiting your review and changes
Posted	You have confirmed the entry; included in all reports; immutable

Drafts are work in progress but still affect account balances and can be shown in the analytics dashboard. When you click Post on a Draft transaction, SWEN:

Validates that debits equal credits again
Records the journal entry permanently and makes them immutable
Marks the linked BankTransaction as reconciled

Posted transactions must not be edited according to the double entry theory. To not make personal accounting too bureaucatic, we still allow to delete posted transactions. It is discouraged though.