Sales Ledger Purpose

The sales ledger, also known as the accounts receivable ledger, is a subsidiary ledger that records all credit sales transactions and the amounts owed by each customer to the business. It provides a detailed record of each credit sale made to customers, payments received from them, and any remaining balances.

Key Features of a Sales Ledger

1. Customer Accounts: The sales ledger maintains a separate account for each customer. This account keeps track of:

   • Invoices issued to the customer (amounts they owe).
   • Payments received from the customer.
   • Any credit notes issued or adjustments made.
   • The current outstanding balance for each customer.

2. Link to Nominal Ledger: The total balance of all individual customer accounts in the sales ledger is summarised and posted to the accounts receivable account in the nominal ledger. This ensures that the overall balance of money owed to the business is accurately reflected in the financial statements.