Ledger

The general ledger is the central record of a company's accounting. It compiles, account by account, all transactions: money in the bank, amounts owed by customers, sales, and expenses. It is from these totals that the end-of-period financial reports are prepared.

Brief

The central notebook: a complete, account-by-account history of everything that happens
It is populated from journal entries (each transaction recorded in two equal installments).
These totals are used to compile the trial balance (a list that verifies that everything balances) and financial reports.
Your software, such as QuickBooks or Xero, keeps it automatically up to date.

Why does this matter?

A well-maintained ledger is like a GPS that's always up-to-date: you know exactly where your money is going, instead of guessing. When your accounts are reviewed and corrected throughout the year, your banker gets what they need quickly, and your accountant spends fewer hours untangling the past year's figures in the spring—hours you're paying for. Conversely, a neglected ledger allows errors to accumulate and be discovered too late. We encourage you to review your totals every month, even if it's just for five minutes. To get everything in order or keep it all neat and tidy, Bankeo will introduce you to a vetted accountant/CPA free of charge, and we'll be there to support you every step of the way.

Frequently asked questions

What exactly is the big book?

This is the central ledger where all your transactions are filed account by account. Imagine a binder with one page per item: one page for money in the bank, one for sales, one for rent. Every time a transaction occurs, it's added to the correct page. By looking at a page, you can see the complete history and total for that account.

What is the difference between a diary and a ledger?

The journal records transactions in the order they arrive, day after day; the general ledger then reclassifies them account by account. The journal records what each transaction was for and when, while the general ledger records how many are in each account. Accounting software performs this reclassification automatically, in real time.

My bookkeeping is behind schedule, where do I start?

We start by catching up on bank reconciliations (comparing your books with your bank statements month by month to ensure they match), then we clean up any outstanding accounts. This is a very common task and it's easily handled with support. Bankeo will connect you with a verified accountant/CPA, or a bookkeeping service, free of charge, depending on the scope of the work, and we'll be there to support you every step of the way.