What is a general ledger?

The general ledger records all financial transactions arising from business activities. It has a debit side that shows the assets or expenses incurred and a credit side that reflects the liabilities or revenues earned.

The general ledger is part of the financial administration and is essential for organizations to have an overview of all financial transactions that occur. This allows us to monitor the organization's finances. The administration provides the overview and insight needed to make the right decisions at the right time. The reliability of financial administration heavily depends on the recordings made in the execution processes, which is why primary recordings in these processes must receive significant attention.

The general ledger offers a detailed overview of all the income, expenses, assets, and liabilities of an organization. This is crucial for preparing accurate financial statements, such as balance sheets and profit and loss accounts. By maintaining a well-kept general ledger, organizations can ensure that their financial transactions comply with applicable regulations and accounting standards. It enables them to conduct audits and meet legal requirements.

The general ledger provides management and stakeholders with valuable information for making informed decisions. By having insight into financial data such as costs, revenues, and cash flow, organizations can engage in strategic planning and budgeting. A well-updated general ledger ensures transparency within the organization and with external stakeholders such as investors, creditors, and tax authorities. This fosters confidence in the financial health and integrity of the organization.

The general ledger is an indispensable tool for financial control, reporting, and decision-making within organizations, playing a crucial role in maintaining transparency and compliance with laws and regulations.

Sustainable success through manageable and controlled growth

The ICR online business software helps entrepreneurs and organizations find balance and peace, through manageable and controlled growth, with the goal of a healthy organization and sustainable success. We do this through the all-encompassing ICR cycle.

Choose our successful approach and start your process to go from ambition to result with the ICR Ambition Refresher!

The comprehensive ICR cycle