How to do an accounting ledger
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Here is how to do an accounting ledger and what it means for small businesses.
An accounting ledger is the list of all your company’s transaction information that need to be kept in order to create the financial reports. The data relating to sales invoices, customer payment, supplier bills, supplier payments, salaries, taxes paid/invoiced/due are stored and categorised into two sections: The debits and the credits.
Here is an example of how a sales affects the ledger.
Mr Johnson buys an apple from you and asks if he can ay you tomorrow. You agree.
1) You enter his name in your debtor’s book and include the date, the item purchased, the amount due and ask Mr Johnson to sign. You might ask for his ID card to note down his address/ phone number or ID.
2) You add the value of the sale in your sales book, including the date, item sold, amount and the name of the person it was sold to.
In your ledger, you have your list of accounts impacted for the day. Your sales amount is the total amount of all the products you solf that day. And your debtor’s account shows the total amount of money your customer owes you.
Here are the elements to track in your ledger:
1) Purchases and expense bills
3) Vendor payments
4) Fixed asset value and depreciation
5) Salary, employee expenses
6) VAT and other taxes
7) Refunds taken/ given
8) Write-offs and revaluation of damaged stock.
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How to do your accounting ledger faster
Entering accounting transactions on paper books is still used to this day. However, finding the right information when you need it can take time. Would you prefer a solution that automates most of the calculations and provides you with your accounting reports, ledger and books in real-time?
A growing number of small and midium sized businesses use a tablet or computer to enter their accounting data on an organised software, built specifically for that purpose. The tool helps you gain a lot of time everyday and lets you focus on the moste important aspect of your business: Sell more!
Need help in doing your accounting ledger faster?
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