Glossary Accounting
Ledger
Definition
A ledger is an account that collects every transaction for one party, income, expense, asset or liability, showing its running balance at any time.
Example
Patel Enterprises' ledger in your books opens November at ₹25,000 Dr. You bill it ₹59,000 on 4 November and receive ₹50,000 by UPI on 18 November, so the balance is ₹34,000 Dr. Sent as a statement, it tells Patel exactly what it owes and why.
Ledger in TallyPrime and in Cashflow OS
Where to find itIn TallyPrime
In TallyPrime each ledger is created under a group, with details such as address, GSTIN, state and bill-wise tracking. Ledger reports show every voucher with opening and closing balances for any period.
On your phoneIn Cashflow OS
Cashflow OS shows Tally ledgers with live balances on phone and web, and shares party statements as a PDF in Tally's format or a simple Hindi page on WhatsApp.
See Party ledger statements
Common misunderstandings
- Watch outPutting a ledger under the wrong group, such as a loan under Sundry Creditors, which skews reports.
- Watch outCreating duplicate ledgers for the same party, splitting its balance in two.
What a ledger does
Every voucher you post touches at least two ledgers: one debited and one credited. A sale on credit to Sharma Traders debits the Sharma Traders ledger and credits the Sales ledger. Over a year, the Sharma Traders ledger becomes the full story of that party: bills, payments, returns and the balance due. Businesses keep ledgers for each customer and supplier (party ledgers), for sales and purchase, for each expense head, for cash and each bank account, for capital, loans and taxes.
Example
| Date | Particulars | Debit | Credit | Balance |
|---|---|---|---|---|
| 1 Oct | Opening balance | ₹40,000 | ₹40,000 Dr | |
| 6 Oct | Sales invoice 214 | ₹1,18,000 | ₹1,58,000 Dr | |
| 15 Oct | Receipt by UPI | ₹90,000 | ₹68,000 Dr | |
| 22 Oct | Credit note 9 (return) | ₹5,900 | ₹62,100 Dr |
This is Sharma Traders' ledger in the seller's books. A debit balance of ₹62,100 means Sharma Traders owes that amount. Sent to the customer, it becomes a ledger statement; see customer ledger statement best practices.
Ledgers and groups
Ledgers are placed under groups, such as Sundry Debtors, Sundry Creditors, Sales Accounts, Direct Expenses, Indirect Expenses, Bank Accounts and Duties and Taxes. The group decides where the ledger's balance appears in the Profit and Loss account or Balance Sheet. A ledger put in the wrong group, such as a loan under Sundry Creditors, makes the reports misleading even when every entry is right.
Where it shows up in TallyPrime
In TallyPrime you create a ledger with a name, a group, and details such as address, GSTIN, state and whether bills are tracked bill-wise. Ledger reports show every voucher, with opening and closing balances, for any period. Cashflow OS shows the same Tally ledgers on phone and web with live balances, and can share a party statement as a PDF or a simple Hindi page on WhatsApp. See voucher for the entries that feed a ledger.
Related terms
VoucherTrial balanceBill-wise detailsOutstandingCost centreAll terms A–Z
Questions about Ledger
What is the difference between a ledger and a journal?
What is a party ledger?
Can a ledger have both debit and credit entries?
What do Dr and Cr mean on a ledger balance?
Can I merge two ledgers for the same party?
This page is general information for Indian businesses, not tax, legal or financial advice. Rules and rates change — check the official portals or your CA before acting.
