Is a document/NoSQL database a good candidate for storing a balance sheet?

Question

If I were to create a basic personal accounting system (because I'm like that - it's a hobby project about a domain I'm familiar enough with to avoid getting bogged-down in requirements), would a NoSQL/document database like RavenDB be a good candidate for storing the accounts and more importantly, transactions against those accounts? How do I choose which entity is the "document"?

I suspect this is one of those cases were actually a SQL database is the right fit and trying to go NoSQL is the mistake, but then when I think of what little I know of CQRS and event sourcing, I wonder if the entity/document is actually the Account, and the transactions are Events stored against it, and that when these "events" occur, maybe my application also then writes out to a easily queryable read store like a SQL database.

Many thanks in advance.

Answer 1

Personally think it is a good idea, but I am a little biased because my full time job is building an accounting system which is based on CQRS, Event Sourcing, and a document database.

Here is why:

Event Sourcing and Accounting are based on the same principle. You don't delete anything, you only modify. If you add a transaction that is wrong, you don't delete it. You create an offset transaction. Same thing with events, you don't delete them, you just create an event that cancels out the first one. This means you are publishing a lot of TransactionAddedEvent.

Next, if you are doing double entry accounting, recording a transaction is different than the way your view it on a screen (especially in a balance sheet). Hence, my liking for cqrs again. We can store the data using correct accounting principles but our read model can be optimized to show the data the way you want to view it.

In a balance sheet, you want to view all entries for a given account. You don't want to see the transaction because the transaction has two sides. You only want to see the entry that affects that account.

So in your document db you would have an entries collection.

This makes querying very easy. If you want to see all of the entries for an account you just say SELECT * FROM Entries WHERE AccountId = 1. I know that is SQL but everyone understands the simplicity of this query. It just as easy in a document db. Plus, it will be lightning fast.

You can then create a balance sheet with a query grouping by accountid, and setting a restriction on the date. Notice no joins are needed at all, which makes a document db a great choice.

Answer 2

You can certainly create such a system. In that scenario, you have the Account Aggregate, and you also have the TimePeriod Aggregate. The time period is usually a Month, a Quarter or a Year. Inside each TimePeriod, you have the Transactions for that period. That means that loading the current state is very fast, and you have the full log in which you can go backward. The reason for TimePeriod is that this is usually the boundary in which you actually think about such things.

Answer 3

Theory and Architecture

If you dig around in accounting theory and history a while, you'll see that the "documents" ought to be the source documents -- purchase order, invoice, check, and so on. Accounting records are standardized summaries of those usually-human-readable source documents. An accounting transaction is two or more records that hit two or more accounts, tied together, with debits and credits balancing. Account balances, reports like a balance sheet or P&L, and so on are just summaries of those transactions.

Think of it as a layered architecture -- the bottom layer, the foundation, is the source documents. If the source is electronic, then it goes into the accounting system's document storage layer -- this is where a nosql db might be useful. If the source is a piece of paper, then image it and/or file it with an index number that is then stored in the accounting system's document layer. The next layer up is digital records summarizing those documents; each document is summarized by one or more unbalanced transaction legs. The next layer up is balanced transactions; each transaction is composed of two or more of those unbalanced legs. The top layer is the financial statements that summarize those balanced transactions.

Source Documents and External Applications

The source documents are the "single source of truth" -- not the records that describe them. You should always be able to rebuild the entire db from the source documents. In a way, the db is just an index into the source documents in the first place. Way too many people forget this, and write accounting software in which the transactions themselves are considered the source of truth. This causes a need for a whole 'nother storage and workflow system for the source documents themselves, and you wind up with a typical modern corporate mess.

This all implies that any applications that write to the accounting system should only create source documents, adding them to that bottom layer. In practice though, this gets bypassed all the time, with applications directly creating transactions. This means that the source document, rather than being in the accounting system, is now way over there in the application that created the transaction; that is fragile.

Events, Workflow, and Digitizing

If you're working with some sort of event model, then the right place to use an event is to attach a source document to it. The event then triggers that document getting parsed into the right accounting records. That parsing can be done programatically if the source document is already digital, or manually if the source is a piece of paper or an unformatted message -- sounds like the beginnings of a workflow system, right? You still want to keep that original source document around somewhere though. A document db does seem like a good idea for that, particularly if it supports a schema where you can tie the source documents to their resulting parsed and balanced records and vice versa.

Answer 4

In this case, a relational database is the most appropriate, since you have relational data (eg. rows and columns)

Since this is just a personal system, you are highly unlikely to have any scale or performance issues.

That being said, it would be an interesting exercise for personal growth and learning to use a document-based DB like RavenDB. Traditionally, finance has always been a very formal thing, and relational databases are typically considered more formal and rigorous than document databases. But, like you said, the domain for this application is under your control, and is fairly straight forward, so complexity and requirements would not get in the way of designing the system.

If it was my own personal pet project, and I wanted to learn more about a new-ish technology and see if it worked in a particular domain, I would go with whatever I found interesting and if it didn't work very well, then I learned something. But, your mileage may vary. :)