6.6 KiB
CTRM Accounting Reporting Architecture
This document defines the conceptual architecture of accounting and financial reporting in a CTRM / ERP environment.
The purpose is to provide a standard framework for financial reporting independent of the technical data model.
This architecture will later guide:
- ERP / CTRM data mapping
- SQL query design
- BI reporting layers
- reconciliation controls
- auditability
The framework follows commodity trading accounting best practices.
1. Reporting Layers
In a CTRM environment, reporting must be organized into five logical layers. Operational Layer ↓ Subledger Layer ↓ Accounting Layer ↓ Financial Reporting Layer ↓ Management Analytics Layer
Each layer has different users and reporting objectives.
2. Operational Layer
This layer contains trading and operational activity.
Typical objects:
- contracts
- trades
- positions
- physical deliveries
- logistics
- settlements
Reports in this layer are typically operational dashboards.
Examples: Open positions Trade lifecycle Contract exposures Inventory movements
These reports are not accounting reports, but they feed accounting events.
3. Subledger Layer
Subledgers translate operational activity into financial transactions.
Typical subledgers in a CTRM: Accounts Receivable Accounts Payable Inventory Cash / Banking Derivatives Forex
Reports in this layer include: Customer balances Supplier balances Payment status Cash movements Inventory valuation Derivative positions
Subledger reports allow operational reconciliation before data reaches the general ledger.
4. Accounting Layer
This layer represents the official accounting ledger.
It contains: journal entries posting dates accounting accounts currencies documents
Core accounting reports: General ledger Trial balance Journal listing Account movements
These reports represent the single source of truth for financial reporting.
5. Financial Reporting Layer
This layer produces statutory financial statements.
Typical reports: Balance sheet Profit & loss Cash flow statement Comparative financial statements
Characteristics:
- structured by account hierarchy
- aligned with accounting standards
- used for management and external reporting
6. Management Analytics Layer
This layer provides business performance analytics.
Examples: Trading P&L Desk profitability Commodity profitability Margin analysis Risk exposure
Data sources may include:
- accounting entries
- positions
- MTM valuations
- hedging data
This layer often feeds BI tools and dashboards.
7. Core Accounting Objects
To support reporting, the system must expose a minimal conceptual model.
Journal Entry
Basic accounting object.
Typical attributes: entry_id journal posting_date document_number account currency debit credit description
Accounting Document
Represents the business origin of entries.
Examples: invoice payment bank transaction mtm adjustment fx settlement
Each document may generate multiple journal entries.
8. Accounting Events
Commodity trading systems generate accounting through events.
Examples: Trade confirmation Physical delivery Invoice issuance Payment execution MTM revaluation FX settlement Derivative settlement
Each event generates a defined accounting pattern.
Example: Customer invoice
Debit Accounts Receivable Credit Revenue
9. Realized vs Unrealized Results
A key concept in CTRM reporting is the distinction between: Realized results Unrealized results
Realized P&L
Generated when economic events are completed.
Examples: sale invoice contract settlement derivative settlement fx settlement
Unrealized P&L
Generated by valuation adjustments.
Examples: MTM valuation inventory revaluation open FX exposures
These entries are usually reversed in the following period.
10. Mark-to-Market Reporting
CTRM systems rely heavily on MTM valuation.
Typical reports: MTM valuation by contract MTM valuation by desk MTM valuation by commodity
Accounting representation: Debit / Credit Unrealized P&L Counterpart MTM reserve account
11. Hedge Accounting
Many CTRM systems implement hedge relationships.
Concepts: hedged item hedging instrument hedge effectiveness
Reports include: hedge exposure hedge effectiveness hedge P&L
Accounting depends on the hedge model used.
12. Forex Reporting
Commodity trading often involves multi-currency flows.
Forex reporting usually includes: FX exposures Realized FX results Unrealized FX results FX revaluation
Key accounting processes: currency translation revaluation of open balances FX settlement
13. Cash and Banking Reporting
Cash reports are essential for reconciliation.
Typical reports: Bank ledger Cash position Payment history Bank reconciliation
These reports ensure: ERP balances = bank statements
14. Reconciliation Framework
A CTRM reporting architecture must include reconciliation layers.
Critical reconciliations: Subledger vs General Ledger MTM vs Accounting MTM Positions vs Accounting Inventory Bank vs Accounting Cash
These controls are essential for audit.
15. Multi-Currency Reporting
Commodity trading is inherently multi-currency.
Reports must support: transaction currency functional currency reporting currency
Typical reporting outputs: local currency group currency contract currency
16. Report Parameterization
Most reports should support standard parameters.
Typical parameters: date_from date_to entity account currency counterparty desk commodity contract
Standardization allows consistent reporting behaviour.
17. Export and Integration
Accounting reports must support export formats.
Standard outputs: CSV XLSX PDF API endpoints
This allows integration with: BI tools regulatory reporting external auditors
18. Auditability
All reports must guarantee traceability.
Requirements: source document reference journal entry reference posting date user identification
This ensures audit compliance.
19. Future ERP Mapping
Once the ERP / CTRM data model is available, the next step will be: map reports → tables map reports → fields define SQL views define BI datasets
The current documentation defines the functional blueprint.
20. Summary
The reporting architecture is based on the following layers: Operational Subledger Accounting Financial Reporting Management Analytics
This layered model ensures: clear responsibilities robust reconciliation auditability scalable reporting
It provides the foundation for implementing accounting reporting in a CTRM / ERP open-source platform.