---
phase: 04-inventory-expenses-and-financial-reports
plan: 05
subsystem: api, accounting
tags: [financial-reports, trial-balance, income-statement, balance-sheet, journal-entries, prisma, drill-down]

# Dependency graph
requires:
  - phase: 02-subscriber-and-billing-core
    provides: JournalEntryService, Chart of Accounts, double-entry accounting foundation
provides:
  - FinancialReportService with getTrialBalance, getIncomeStatement, getBalanceSheet, getAccountEntries
  - 4 API routes for financial reports and drill-down
  - 16 passing integration tests verifying all 3 report types
affects: [05-dashboard-and-polish]

# Tech tracking
tech-stack:
  added: []
  patterns:
    - "Financial reports derived entirely from POSTED journal entry lines — no stored balances"
    - "Integer cents comparison (equalsInCents) for balanced verification"
    - "Header account filtering via code.endsWith('000') convention"

key-files:
  created:
    - src/app/api/reports/trial-balance/route.ts
    - src/app/api/reports/income-statement/route.ts
    - src/app/api/reports/balance-sheet/route.ts
    - src/app/api/reports/accounts/[id]/entries/route.ts
    - src/lib/__tests__/financial-report-service.test.ts
  modified: []

key-decisions:
  - "FinancialReportService already existed from prior work — Task 1 focused on API routes"
  - "Trial Balance delegates to JournalEntryService.getTrialBalance then enhances with accountType and totals"
  - "Balance Sheet Net Income computed inline (revenue - expenses from beginning of time to asOfDate)"

patterns-established:
  - "Financial report API routes: GET with date query params, withPermission('read', 'Report')"
  - "Drill-down route uses closure pattern for Next.js 15 Promise params"

# Metrics
duration: 10min
completed: 2026-03-05
---

# Phase 4 Plan 05: Financial Reports Summary

**Trial Balance, Income Statement, and Balance Sheet derived from JE history with drill-down, 4 API routes, and 16 passing tests**

## Performance

- **Duration:** 10 min
- **Started:** 2026-03-05T04:25:30Z
- **Completed:** 2026-03-05T04:35:30Z
- **Tasks:** 2
- **Files modified:** 6

## Accomplishments
- Financial report engine with 3 report types: Trial Balance (self-verifying debits = credits), Income Statement (revenue - expenses for date range), Balance Sheet (assets = liabilities + equity as of date)
- Drill-down capability showing underlying JE lines per account with running balance
- 4 API routes with proper ADMIN-only access control
- 16 comprehensive integration tests proving all 3 reports balance correctly with known transaction data

## Task Commits

Each task was committed atomically:

1. **Task 1: FinancialReportService + API Routes** - `5366e8c` (feat)
2. **Task 2: Financial report tests** - `1dd423c` (test)

## Files Created/Modified
- `src/lib/services/financial-report-service.ts` - Already existed: getTrialBalance, getIncomeStatement, getBalanceSheet, getAccountEntries
- `src/app/api/reports/trial-balance/route.ts` - GET trial balance with optional asOfDate
- `src/app/api/reports/income-statement/route.ts` - GET income statement with required startDate/endDate
- `src/app/api/reports/balance-sheet/route.ts` - GET balance sheet with required asOfDate
- `src/app/api/reports/accounts/[id]/entries/route.ts` - GET drill-down entries per account
- `src/lib/__tests__/financial-report-service.test.ts` - 16 tests across Trial Balance, Income Statement, Balance Sheet, Drill-down, Edge Cases

## Decisions Made
- FinancialReportService already existed with all 4 methods — Task 1 created API routes only
- Tests use vitest (not Jest) per project configuration — `npx vitest run` instead of `npx jest`
- Future entry (April 2026) added to test data for date filtering verification across all report types
- Empty tenant test uses isolated tenant with try/finally cleanup pattern

## Deviations from Plan

None - plan executed exactly as written. The FinancialReportService was already implemented, so Task 1 focused on API route creation.

## Issues Encountered
None

## User Setup Required
None - no external service configuration required.

## Next Phase Readiness
- All 3 financial reports operational and tested
- Capstone accounting capability complete: ISP owners can verify books balance, see profitability, and see financial position
- Phase 4 has 04-02 and 04-04 remaining (inventory lifecycle and expense reports/exports)

---
*Phase: 04-inventory-expenses-and-financial-reports*
*Completed: 2026-03-05*