General ledger accounts are very important for any organizations because these serve as financial summary of an organization. Basic purpose of general ledger is to find out current balance of important areas therefore it is necessary to properly maintain accounts ledger. Usually accounts ledger is divided into four basic parts including assets, liabilities, income and expenses. Assets are those supplies, properties and cash items that are owned by the organization while as liabilities include outstanding debt own by the company. Income includes amount of money that is earned by a business. Expenses are those costs that are necessary to incurred to complete business operations such as payment of rent, salary of employees, advertisement expense etc.
Tips to Maintain Accounts Ledger
It is necessary to maintain your accounts ledger because it helps you a lot to make other financial statements. In order to help you, I am going to share some tips to maintain accounts ledger:
- In first step, you have to set up a ledger master file with some columns to note down details of all transactions. Label one column at the top of the page with four important sections of the ledger such as assets, liabilities, expenses and income. Left side of the ledger will contain details of transactions. You can label rows with the week or month according to your convenience. Top page will present the balance in each section at the commencement of each period.
- It is necessary to identify your total business assets by determining the values of properties of your business such as equipment, supplies and cash in hand etc. You have to estimate total value of your business assets to write them on the first row of the assets column.
- In order to calculate total profit of your business, you have to estimate total expenses of your business such as salaries of staff, total rent, marketing expenses and supplies. You can label the rows by week or months according to your need. Take average of periodic expenses including insurance expense or any other monthly expense.
- Liabilities are important part of business therefore you cannot ignore them because after having exact figure of liabilities you can easily calculate profit of your business. You can discriminate your liabilities into short term and long term categories according to the nature of your business.
- Estimate all income sources of your business to get an exact figure as net income of your business. All figures related to income accounts should be mentioned in the income column.
- After writing all figures under their particular heads, you can calculate total for each period. Well maintained accounts ledger will help you to prepare financial statements of your organization for each fiscal year.
- You can maintain weekly or monthly ledger according to the volume of your business but do not forget to transfer whole information to the master ledger account to get accurate figure of your assets, liabilities, income and expenses.
Here is free Accounts Ledger Template created using Microsoft Excel,
Click here to download Accounts Ledger Template
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