What is a General Ledger?
If you are just starting out, in business, you may be asking what is a general ledger? That’s a good question because a General Ledger is the foundation for all of your bookkeeping. You need to get that right if you are going to succeed financially.
The General Ledger includes accounting data posted from sub-ledgers, such as accounts payable, accounts receivable, cash management, purchasing and fixed assets. This is the place that you record your debits and credits.
Most businesses today have primary and secondary ledgers for accounting purposes. If your ledgers are incomplete, this will alter your company’s financial statements and result in inaccurate information.
Accounts recorded in a general ledger include:
- Assets – this account is for items that add value to your business. For example, property, equipment, vehicles, copyrights, or trademarks.
- Liabilities – this account is to keep track of the debts that your business owes. Some liabilities are mortgages, loans, money owed to vendors, or government agencies.
- Revenue – this account should represent the total amount of sales profit that your venture earns during a certain time period. Revenue is earned from selling products, providing services, renting equipment, or leasing property.
- Expenses – this account represents all the costs associated with running your business. This can include supplies, equipment, utilities, building maintenance, lease payments, payroll, etc.
- Equity – this is determined by basically subtracting your current debts from your known assets.
The Connection Between General Ledgers and Business Taxes
Keeping balanced and accurate financial ledgers is crucial when preparing to do your taxes. Here are some basics of tax preparation. Consider using Slaton Financial Services for all your tax prep needs.
Rest assured our team at Slaton keeps up with all local, state, and federal guidelines. We are especially vigilant right now to stay on top of changing deadlines and other issues due to the worldwide pandemic. We can advise you on all the necessary records you need for your taxes. You will not miss any tax deadlines when you choose to go with Slaton to handle your tax preparation.
Call Slaton Today
If you want to get a leg up on the competition, consider outsourcing the general ledger and bookkeeping to Slaton Financial Services. We are trained and ready with the latest software available to keep track of your ledgers, saving you and your business time and money.
Call us today and let us take the responsibility of all your bookkeeping needs off your hands. If it’s after hours, you can fill out this contact form.