The general ledger is one of the accounting activities that is important to understand. Unfortunately, there are still many who do not understand the meaning and how to make this big book.
From the ledger, we can group the same accounts to make the identification process easier for business operations.
Actually, how to make a trading company ledger is quite simple and easy. It’s just that a lack of understanding makes it look complicated.
Sales volume or the types of products traded also affect the complexity of making this ledger so that online bookkeeping software can be a solution for recording every transaction that occurs.
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To make it clearer, we first understand the meaning of accounting ledgers as well as the types and ways of making ledgers.
The Meaning of the Big Book
The general ledger is a summary of all transactions in general and special journals.
Meanwhile, according to some experts, the ledger is defined as follows:
1. Ade F.
The general ledger is a set of accounts that functions to classify transactions in a general journal.
2. Gito Brahmin
The general ledger is the final stage of recording in accounting. Where the contents of the note is a summary of data that has been classified and refers to the journal.
Generally ledgers are owned by business entities and the types are different.
It depends on the high and low transactions of the business entity or company.
Recording in a ledger is known as posting. This is done when you finish recording in the general journal.
In the general ledger, there are two types of accounts:
Real accounts, namely accounts that generally appear in the recording of assets, balance sheets, liabilities, debt and capital
Nominal account, is the type of account that usually appears in expense, income, and profit and loss accounts
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Types of Ledgers
Before learning how to make a ledger, you also have to know what types or types there are. The types of ledgers include:
1. General
The first type is the general ledger. The contents are transactions relating to accounts receivable, cash, debt inventory and also working capital.
The transactions mentioned above are estimates in one period that project the effect on business capital, changes in company assets as well as liabilities.
Recording in this general ledger is based on the recapitulation of special journals at the end of the month. So you have to post general ledger at the end of the month as well.
2. Subsidiary Ledger
This type of ledger works as an add-on. The contents are a collection of special accounts payable and accounts receivable, plus detailed information.
The subsidiary ledger itself is still classified into two different types, namely:
- Subsidiary Ledger for accounts receivable, contains details of customer records that frequently transact on credit along with the amount of credit.
- Recording of bills for each customer is separated. Meanwhile, changes in receivables as a whole are recorded in the accounts receivable estimate in the general ledger.
- Subsidiary Ledger for accounts payable. Its function is to record suppliers who give you product credit or other forms of assets.
Don’t forget to use online accounting software , payable records for each supplier are also separated.
Changes in overall debt are recorded in the accounts payable account in the general ledger in accordance with the principles of accounting.
Meanwhile, changes in debt to each supplier are included in the respective estimates in the subsidiary ledger of this debt.
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Ledger Forms
Besides having more than one type, the form of ledgers is also more than one. What types of ledgers exist and are widely used? The following is a brief explanation that we have prepared.
- T shape, the simplest form and indeed like the letter ‘T’. The account name is at the top left, while the code is at the top right. Credits on the right and debits on the left
- Skontro, column form is divided into two for debit and credit
- Staffle single balance column, often used for transactions that have many details or explanations
- Double column staffle, not much different from single balance column staffel. It’s just that the balance is divided into two into debit and credit
How to Make a Ledger that is Easy to Understand
Actually it’s not difficult to make a ledger especially if you use a complete bookkeeping software . It’s just that you have to understand the stages.
- Fill in the ledger posting date, make sure it is the same as the recording date in the general journal
- Fill column. information with accounts that give effect to the accounts of the general ledger itself. For example, if there is an opening balance in the general ledger, then fill in the column with a description of the opening balance as well
- The reference column is filled with the name or type of journal posted, along with the page number. For example, general journal page 3, then the reference is filled in JU-3
- The debit and credit columns are filled according to the position of the account in question in the general journal. For example, a cash account in the general journal is on the credit side, so the general ledger remains on credit
- The balance column is the place for the overall results of addition and subtraction to get the final balance for the account in the general ledger
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Functions of the Ledger
After you understand what a ledger means, what types it is and how to make a ledger, now you have to know its function too.
The function of making a ledger is to:
- Facilitate the process of summarizing transactions recorded in the general journal
- Being a tool for classifying financial data, it also identifies conditions and the number of accounts or real accounts whether there are differences or not
- Become a reference for grouping transactions, both in general journals and previous journals
- Become a complement to the arrangement of financial statements as needed. So, without a ledger, the financial reports may be lame or incomplete. So even if you are assisted by an online financial reporting application , you still need a ledger to complete it.
Benefits of the Ledger
Besides having many functions, this ledger also has many benefits. That’s why you, especially business people, must understand it.
Because most of the benefits provided by the general ledger relate to financial conditions as well as operations and business development.
The following are some of the benefits that can be obtained from a ledger for your business.
- Be a counterweight to all types of financial reports
- Become a source of information on the main track record of financial reports
- Can help identify any ‘extraordinary’ or unusual transactions
- Help find any indication of fraud or manipulation of data
- Become one of the benchmarks of the financial health of a business
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So, why are business actors required to have a ledger? Because there are many benefits that can be provided for the continuity and development of your business.
Don’t wait until your business is on a large scale. Precisely starting from a small scale or beginner, you have to start implementing it.
How to make ledgers for small businesses is of course also simpler. When you are used to it, even when your business is growing, it will be easier for you to adjust the ledger.
The complexity of making ledgers depends on how high the transactions are carried out by a business. So, if you wait for the business to develop, it will be more difficult to understand and make it.