diff --git a/src/lib/ledger.ts b/src/lib/ledger.ts
new file mode 100644
index 0000000..a937f60
--- /dev/null
+++ b/src/lib/ledger.ts
@@ -0,0 +1,95 @@
+// Priority order for payment allocation: Bank → Interest → Late → Legal → Admin → Violations → Assessments
+export const BUCKETS = ["bank", "interest", "late", "legal", "admin", "viol", "assess"] as const;
+export type Bucket = (typeof BUCKETS)[number];
+
+export const BUCKET_LABEL: Record<Bucket, string> = {
+  bank: "Bank Fees",
+  interest: "Interest",
+  late: "Late Fees",
+  legal: "Legal Fees",
+  admin: "Admin Fees",
+  viol: "Violations",
+  assess: "Assessments",
+};
+
+export const BUCKET_SHORT: Record<Bucket, string> = {
+  bank: "Bank",
+  interest: "Int",
+  late: "Late",
+  legal: "Legal",
+  admin: "Admin",
+  viol: "Viol",
+  assess: "Assess",
+};
+
+export interface LedgerEntry {
+  id: string;
+  collection_id: string;
+  entry_date: string;
+  description: string | null;
+  account: string | null;
+  assess: number;
+  late: number;
+  admin: number;
+  legal: number;
+  viol: number;
+  interest: number;
+  bank: number;
+  payment: number;
+  debit?: number;
+  credit?: number;
+  transaction_type?: string;
+}
+
+export const num = (v: any) => Number(v) || 0;
+
+/** Sum of all charge columns for one row */
+export const rowCharges = (e: Pick<LedgerEntry, Bucket>) =>
+  BUCKETS.reduce((s, b) => s + num((e as any)[b]), 0);
+
+/** Compute live remaining balance per bucket given chronological entries (FIFO payment allocation by priority). */
+export function computeBucketBalances(
+  entries: LedgerEntry[],
+  opening = 0,
+): Record<Bucket, number> & { total: number } {
+  const bal: Record<Bucket, number> = {
+    bank: 0,
+    interest: 0,
+    late: 0,
+    legal: 0,
+    admin: 0,
+    viol: 0,
+    assess: 0,
+  };
+  // Treat opening balance as outstanding assessments
+  bal.assess += opening;
+
+  for (const e of entries) {
+    BUCKETS.forEach((b) => {
+      bal[b] += num((e as any)[b]);
+    });
+    let pay = num(e.payment);
+    if (pay > 0) {
+      for (const b of BUCKETS) {
+        if (pay <= 0) break;
+        if (bal[b] <= 0) continue;
+        const take = Math.min(bal[b], pay);
+        bal[b] -= take;
+        pay -= take;
+      }
+      // any leftover credit goes against assessments (overpayment)
+      if (pay > 0) bal.assess -= pay;
+    }
+  }
+  const total = BUCKETS.reduce((s, b) => s + bal[b], 0);
+  return { ...bal, total };
+}
+
+/** Running balance per row */
+export function withRunningBalance(entries: LedgerEntry[], opening = 0) {
+  let bal = opening;
+  return entries.map((e) => {
+    bal += rowCharges(e) - num(e.payment);
+    return { ...e, runningBalance: bal };
+  });
+}