A general ledger of a company represents its financial record-keeping system. Free General Ledger Template Excel has many use full properties that we are going to discuss here.
It is containing validated balance data in terms of credits and debits. Also, it keeps a record of every single transaction performed by the company during a particular time period.
A general ledger is like a bunch of grand book of company finance and accounts. It includes every information that is required to generate major financial sheets of a company such as income statements and balance sheets.
Thus, the general ledger also helps to calculate company assets, liabilities, stockholders’ equity, revenues, income, and expenses.
A general ledger of any company covers almost similar kind of details. Thus, a universal general ledger template excel is helpful for many companies to maintain company accounts.
Usually, the ledger collects transaction information from sub-ledger accounts commonly referred to as the company’s chart of accounts. It’s a breakdown of general ledger financial transactions and contains a complete record.
The transaction information from all sub-ledgers is summarized on the general ledger and the trial balance is generated. After verification and nullification of errors by adjustments and additional necessary entries, a trial balance is available to generate important financial statements of a company.
Importance of General Ledger Template Excel
The general ledger template excel saves time and effort to make a ledger sheet from scratch. Further, the importance to use the general ledger template can be understood from the importance of the general ledger itself.
It contains a summary of company transactions and its details are available in a chart of accounts. This summarized ledger is useful to create an income statement, balance sheet, cash flow sheet, and trial balance.
These sheets are very helpful for company management, accounts, investors, and stakeholders to assess the financial performance and stability of a company.
Besides a general ledger represents a whole story of any spike in expenses or decline in revenue or net income of a company. Further, the accounts team has to go back to the general ledger and dig into details of any transactions in case of any account errors in financial statements.
Elements of Excel General Ledger Template
There are several types of general ledger templates. It depends on how much information is required to mention the general ledger. Also, how is a company going to use a general ledger?
These general ledgers usually record balance based on debit and credit methods. Thus, a very basic general ledger of a company must include financial transaction detail in terms of debt or credit.
However, further details such as transaction ID, description, and journal reference/category can be added.
Finally, a balance for each transaction is recorded in the final column. Also, the opening and closing balances are mentioned in the sheet.
The main categories for credits in the general ledger are cash, petty cash, supplies, accounts receivables, inventory, and intangible assets. While debit categories include accounts payables, salaries and wages, unearned revenues, and taxes.
If a company’s general ledger includes major sales or purchase entries. It is recommended to include invoice number, quantity, rate, and the total value of sold or purchased goods.