Account balance deduction after expense type transactions

[AminRafaey]

Shouldn't the total amount of an account should be adjusted after adding transactions to it? I am just exploring this product and this is something I am trying to understand.

[scubamaggo]

It should, yes. But when dealing with manual accounts, one also has to consider the date for which the amount of the account was entered. This is the "valuation" found in the "History" section of the account.

This valuation is static, and the transactions adjust the value of the account around it.
For example, if you entered an account value of 100 USD for the date 2024-05-21, and then entered an expense of 5 USD for the date 2024-05-20, the current value of the account stays at 100 USD, but the value of the account prior to 2024-05-20 is raised to 105 USD, as this was the value it had to be for it to have a value of 100 USD after incurring the expense of 5 USD.

[BenjaminMichaelis]

This is confusing behavior to me. I would expect just an additional transaction needed called like "reconciliation" or similar. It seems weird to separate these two ideas of "history" and "transactions" even in the UI.

[zachgoll]

@scubamaggo's explanation is correct here. Here's the original PR that gives some examples and explanations of the existing algorithm. It has changed slightly since then, but the overall strategy is intact still.

Additionally, here are a few points that might help as well:

Account Balance Table is Derived

The reason for the "Valuation" concept is so we can record an explicit "start balance" and "balance checkpoints". Whether this concept belongs in the UI for all accounts is debatable, but it does have utility to the system.

The Valuation concept allows for an incomplete list of transactions. For example, a user may have transactions for the last year, but not the full history of the account. In that case, they'd provide us a "start balance" (Valuation), and then we'd use the list of transactions to walk that balance forward to the current day. If they're missing a few balances in-between, they can enter another Valuation to correct the historical balances.

This is an alternative to the "reconciling transaction" approach. Instead of the user entering a "corrective" balance and then our system running calculations to derive what the reconciling transaction should be, we simply say, "the account was X balance on Y date".

With Valuation and Transaction records for each account, we can then derive the historical account balance table. The benefit here is that we can always recreate the user's historical balances through a "sync" process.

Syncs are required

There is still a bit of work to do here, but the current system will "sync" an account by running an algorithm against the account's Valuation and Transaction records.

@AminRafaey to answer your original question—yes, entering a transaction should alter the historical account balance graph. You may need to select a different date period for your graph as we show the "1 month" by default. If the transaction you've altered is older than 1 month, you may not see the adjustment take effect.

If you still don't see balances changing correctly, it may be worth opening an issue.

Conditional accounts views

@BenjaminMichaelis I agree that for some types of accounts, it probably does NOT make sense to show both transactions + valuations in the UI. We currently have both as an interim step before we start building "type-specific" account pages (i.e. Depository, Investment, Property, Vehicle, Loan, etc.)

For example, Depository (checking, savings) accounts should probably only have a list of transactions showing in the UI with the option for the user to enter a "start balance" (a balance + date, aka, "Valuation").

Conversely, a "Property" account makes more sense to include a "history" list without any transactions. This is because we'll be pulling in periodic property "valuations" from external providers like Zillow.

We'll be adding these type-specific account pages in the near future but hopefully this helps a bit!

[AminRafaey]

Hi @zachgoll Please have a look: https://www.loom.com/share/6a02becfc6404703a8a3a5b1e87f806a?sid=c2f53ea9-05ce-435f-a2df-e5672b80d1f1
Moreover it's the latest version. Which I just updated.

[scubamaggo]

Future transactions are not supported yet: #775

The flow of your account that you set up with 0 seems to align to the logic described above:

• You start the account with a valuation of 0 USD on 2024-05-23
• You add an income of 100 USD on 2024-05-01. This does not change the valuation of 0 USD on 2024-05-23, as this is fixed and can't be changed by transactions. It does tell the system that you added 100 USD on 2024-05-01, after which your account valuation is 0 USD. Therefore, the valuation of the account before the income had to be -100 USD.
• You add an Expense of 10 USD on 2024-05-05. One could now argue that this should change the initial valuation to be -90 USD, so that after an income of 100 USD and an expense of 10 USD you would end up at 0 USD. Instead, it keeps the valuation prior to 2024-05-05 (0 USD), changes the valuation of the account to -10 USD past 2024-05-05, and then has a final valuation of 0 USD on 2024-05-23.

The Expense/Income swap seems like a bug.

I think starting with a bank account of 0 and then adding historical transactions to it is not the intended approach. If you want to start tracking your account, you will likely pick some time in the past (or today) and choose the current value of that account as the starting value. Afterwards, you will add transactions after the initial valuation date, which automatically change the valuation of the account, including the valuation for the current date. But you would not set todays value to be 0, and then add historical transactions.

[zachgoll]

@AminRafaey I think @scubamaggo covered most of it here, but I think the big problem that we're facing is the app version that you're running. You are correct in noting that there are bugs here.

But it looks like you're on v0.1.0-alpha.1, but we've pushed fixes for pretty much everything that you're experiencing in the latest version of the app (If I remember correctly, v0.1.0-alpha.2 should have the fixes if you want to stay on the "stable" version).

All that said, you might need to go into Render directly and hit the "deploy latest commit" because there was a bug on your current version that prevented app instances from updating correctly.

Let me know if you still experience this once you're updated.