First, what is a general ledger?
A general ledger is a record of all of a company’s financial transactions. It is a central record-keeping system that contains all of the company’s accounts and their balances. The general ledger typically includes accounts for assets, liabilities, equity, revenue, and expenses.
The general ledger is used to track the financial performance of a company and to produce financial statements, such as the balance sheet and income statement. It is an important tool for accounting and financial management, as it provides a detailed record of the company’s financial transactions and helps to ensure that the company’s financial records are accurate and complete.
In a manual accounting system, the general ledger is typically a set of physical ledger books that contain the entries for each account. In a computerized system, the general ledger is typically a digital record that is stored in a database.
The general ledger is used in conjunction with other accounting records, such as the accounts payable ledger (which tracks the company’s payables to suppliers) and the accounts receivable ledger (which tracks the company’s receivables from customers). These records provide more detailed information about specific types of transactions, and are used to prepare the company’s financial statements and make informed business decisions.
General Ledger Reporting for financial health
General ledger reports are used to track and monitor the financial performance of a company. They can be used to prepare financial statements, such as the balance sheet and income statement, and to make informed business decisions. They are also used to ensure that the company’s financial records are accurate and complete.