What is Ledger?

A ledger is a book or a collection of accounts where all financial transactions of a company are recorded and stored. The primary ledger in any accounting system is the General Ledger, which contains a summary of every account on the company's Chart of Accounts. There are also subsidiary ledgers that provide more detailed information, such as an Accounts Receivable ledger that lists every customer invoice.

For Startups: Modern cloud accounting software automates the ledger process. When a transaction is entered (e.g., an invoice is created), the software automatically posts the debit and credit to the appropriate accounts in the General Ledger. For a startup, this automation is key to maintaining accurate records efficiently.

Example: A startup's General Ledger contains all its accounts: Cash, Accounts Receivable, Sales Revenue, Rent Expense, etc., with a detailed history of all transactions for each.