Core Concepts
Overview
The Asset API is infrastructure to build accounting software. It enables a company to easily offer accounting services to its customers. This page outlines key accounting terms and Asset specific definitions which will help you utilize our APIs.
Tenants - Your Platform
A Tenant is Asset’s representation of our Customers: the company that is providing accounting features to their SMB customers. Tenants integrate with the Asset API and manage their Businesses.
Businesses - Your SMB Customers
A Business represents a business entity (SMB) in Asset. Each Business has its own profile, defining financial details, legal information, and authorized users. A Business has its own set of financial records within Asset (i.e. their “books”).
Ledgers
Ledgers represent the financial activity and value within a Business. Ledgers have one of five types:
- Revenues – Money earned.
- Expenses – Money spent.
- Assets – Resources owned by the Business.
- Liabilities – Debts or financial obligations owed by the Business.
- Equity – The residual value in the business liabilities are deducted from assets.
Each Business has a Chart of Accounts, a unique and complete set of Ledgers used to track financial activity. While no two Businesses are identical, standard accounting principles influence how accounts are structured. Asset provides a default Chart of Accounts to streamline setup, which can be customized as needed.
Asset supports ledger subtypes to further classify accounts based on standard accounting practices. For example, assets can be divided into current assets (e.g., cash, accounts receivable) and non-current assets (e.g., real estate, long-term investments).
Journal Entry
A Journal Entry records the movement of value between Ledgers, consisting of two or more Lines. Each Journal Entry must be balanced, meaning total debits must equal total credits.
Journal Entries fall into two categories:
- Cash Entries: Transactions where money changes hands.
- Accrual Entries: Transactions where value is recorded before cash moves. Examples include:
- Accounts Receivable: A sale is recorded when an invoice is issued, even if payment hasn’t been received.
- Depreciation: A business records the decline in an asset’s value over time, even though no money is exchanged.
Asset supports both cash and accrual accounting, providing flexibility in how financial activity is tracked and reported.
Each Line in the Journal Entry has:
- An amount – The value being recorded.
- Direction – Debit (value added to a ledger) or Credit (value removed from a ledger).
- Ledger – The specific account affected by the transaction.
- Date - The date the transaction occurs
What are Debits and Credits?
- Debits typically represent money going into something valuable (e.g., increasing cash, buying equipment, paying rent).
- Credits typically represent money going out or obligations increasing (e.g., decreasing cash, taking on a loan, earning revenue)
Transactions
A Transaction represents a real-world financial activity, such as a payment, deposit, or expense, that occurs within a Business. Transactions contain key financial details, including amount, date, description, and account information. They may also include additional metadata, such as merchant details or payment methods, when available.
Transactions in Asset are imported via the API or through native data integrations with external financial systems. Each Transaction is categorized and recorded in the ledger for accurate financial tracking.
Key Transaction Fields
- Amount – The monetary value of the transaction.
- Date – The date when the transaction occurred.
- Description – A brief summary of the transaction.
- Account – The source or destination ledger for the transaction.
Transaction Integrity in Asset
Once a Transaction is posted in Asset, it cannot be directly edited by a Tenant. This ensures data integrity and auditability in the accounting system. Any necessary adjustments must be made through adjusting Journal Entries, preserving a clear financial record. If a Transaction is updated or deleted by the source (E.g. Plaid) the corresponding Journal Entry will be deleted and a new one created.
Linked Accounts
In Asset, Linked Accounts are the origin of Transaction data, representing external financial sources where actual business activity occurs. The most common example is bank accounts, but other sources include payroll providers (e.g., Gusto) and merchant processors (e.g., Square). These Linked Accounts act as the entry point for financial transactions that flow into Asset
Accounts Attributes in Asset
| Attribute | API Request Field | Description |
|---|---|---|
| Institution Name | institution_name | The name of the financial institution (e.g., “Wells Fargo”) |
| Account Type | account_type | Defines the type of financial account. Allowed values: bank_account, credit_card, prepaid_card, payments, payroll, loan, accounts_receivable, accounts_payable |
| External Account Balance | external_account_balance | The Linked Account balance as provided by the data source at the end of the reporting period. |
| Ledger Balance | ledger_balance | The running balance after each Transaction is processed in Asset |
| Account Status | account_status | Indicates whether the account is actively tracked. Accepted values: Active, Inactive. |
| (Optional) Inactive Date | inactive_date | The date a Linked Account was marked as inactive. Transactions will not be imported after this date |