The way we think about money needs to change
Most accounting systems connect a single entry (representing a product, service, etc) to a single corresponding payment. You bought your friend dinner for $42.50; your friend transferred $42.50 to your account. The entry is settled.
In an ongoing relationship where value is exchanged, the principle that each payment must correspond to a discrete transaction creates needless overhead. Imagine it was only $4.25 you owed your friend; would it really be worth settling up and assigning a single accounting entry to it? Flextab offers another way of thinking about money that focuses on only one thing: the net balance.
Say you owe your friend Alice $40 for dinner and $20 for lunch, and you send her $50. Does that leave $10 remaining for the lunch? $10 remaining for dinner? $5 for each? Does it really matter?
Because of the way we’ve been conditioned to think about payment, people often arrange this in their mind as “she paid for this and this but not for this other thing.” Yet this adds unnecessary complexity.
One reason people make this distinction is that perhaps one of these items was agreed upon, but not the other. Perhaps you think Alice drank more wine and so you should only pay $30. But if that’s the case, wouldn’t it be better to have a way to bring this up, instead of communicating it by sending a payment?
This pay-per-transaction model is so systemic, it’s found even at the highest levels of government. Ever had your tax authority misclassify a payment you sent? It happens. You get a refund check for overpayment of one bill and a late notice for not paying the other.
Flextab helps with all of this. Instead of attributing payments to specific items, it just keeps one overall tally.