No matter the size of your business, bookkeeping is a requirement that remains constant and is also what allows you to know the financial health of your company. This is a job that has to be maintained on a regular basis with accuracy and efficiency.
The general ledger for your business is key in knowing the financial health of your company. If your staff isn’t keeping up with general ledger entries, this can affect your business in significant ways. Here at Slaton, we have a team of professionals who are ready to help you with all of your bookkeeping needs.
What is a General Ledger
Think of your general ledger as the foundation for all of your bookkeeping. It is here that you record debits and credits. It is important that these be in balance. If they aren’t balanced, it can impact your business’s financial statements in turn giving you inaccurate financial reports.
The accounts recorded in a general business ledger include:
This account is for items that add value to your business. It can include physical items like vehicles and property as well as non-physical items like copyrights or trademarks.
This account is for the debts your company owes. It can include money owed to a vendor, employee or government agency. Additional liabilities would be mortgages and loans.
Equity can be determined by subtracting your total liabilities from your total assets. This is known as your net worth, net assets and owner’s equity.
This account is for your revenue earned from your business like sales profit. It is recorded as the amount of money your venture receives during a certain time period. Revenue can include monies earned from activities like renting a building the business owns.
This account is simply all of the costs associated with your business. It typically includes equipment, supplies, tent, utilities and more.
What is a Secondary General Ledger?
A secondary general ledger is an additional ledger for the purpose of tracking alternative accounts. It can use a different accounting method from the primary general ledger. This is done to allow the classification of items to meet different reporting requirements, usually for state or federal agencies that have conflicting reporting rules. It will still have the revenue, expenses, liabilities, equity and assets, but the way that the computer categories each entry may be slightly different.
If that sounds daunting, this is a great reason to outsource your bookkeeping with Slaton Financial. We are trained and ready with the latest software needed to keep track of your general ledger and secondary ledger in a very efficient manner saving you and your business time and money.
How does your General Ledger affect Reporting?
Your general ledger for your business is the key facet in knowing the financial health of your company. Your general ledger must be in balance with all entries properly done. Many businesses choose to use a financial service business to make sure everything is accounted for and balanced.
Here are five main ways your balanced primary general ledger leads to correct reporting:
- It creates an overall picture of the financial health of your business.
The general ledger shows every single transaction the business undertakes.
- It is the foundation for maintaining accuracy of all other financial accounts.
The general ledger is where you get the data for your trading account, profit and loss statement.
- It helps to manage company spending, putting you in a better financial position.
The general ledger is a way to have accurate reporting on income and expenses. It allows you to trace what you are spending money on and make adjustments.
- It helps to discourage and discover fraud.
When you can easily trace your transactions, highlighting possible fraud and odd transactions are made easier. The best systems have all kinds of checks and balances to spot unusual activity which can prevent losses before they occur.
- It makes your tax time reporting much easier.
The general ledger should make tax calculations easier and more accurate.
Call Slaton Financial Today
At Slaton Financial Services, we have an expert staff that can handle your bookkeeping needs including your ledgers and all of your reporting as well. We stay up to date with changes in state and federal tax guidelines that are important to your company.
Call Slaton Financial Services today and let us take on the responsibility of your bookkeeping so you and your staff can focus all of your energy on moving your business onward to great success.