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Comment by kdmtctl | Hacker News Reader

There are no 3 leg transactions in a ledger. You described an order. Ledger transactions is one layer deeper. Order creates 2 different transactions: Payment correspond to payments accounts, taxes to the Taxes Payable. That is how classic bookkeeping works.

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Sorry what? No, I'm describing a transaction. There is nothing preventing n-leg transactions in a ledger. Neither a physical one, nor a digital one.

They're complicated to balance, so it's not commonly done in physical ledgers for sure, but in digital ledgers it's completely fine. You just have to make sure they do balance.

Orders are not relevant for ledgers. The system I describe is relevant for individual transactions -- for example, a single bank payment that pays for two outstanding invoices at once absolutely SHOULD create a single transaction with three legs: One out of the bank account, two to payables.

A single bank payment for two outstanding invoices to a single entity or two different entities? In the later case there should be different accounts credited. Technically it is possible to account, but a bank should obey the accounting practices and generate multiple transactions on different accounts. The higher level document could be atomic indeed, so it either registers as a batch or not registers at all.

In the former case, yes, not the latter. Real-life scenario: You have a supplier doing both staff outsourcing and material supplies, you have two outstanding invoices in each of those categories, your pending payments in those are tracked separately (for whatever reason), and you do a single bank payment for both.

Anyway, this is just a simple example, but an invoice with VAT on it is IMO the most common example. Or, another one my software support: A bank transaction with embedded banking fees. Some do separate fees, not all. Currency conversion fees are another example.

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