How to set up a ledger book

If you have a small business or you are an independent contractor, you must keep good accounting records. Many small businesses and independent contractors do not have the volume of business transactions that warrants purchasing and setting up accounting software, but tracking your business transactions in a ledger book will provide you the same level of detail. Detailed accounting records make tax and financial statement preparation easier and allow you to track the balance in a business current account.

Purchase a ledger book at an office supply store or create your own ledger book with spreadsheet software, such as Microsoft Excel. You can also use a spiral notebook as a ledger book by simply drawing lines down the pages to create columns.

Enter headings at the top of the first ledger page to establish what information you will record in the various columns. At minimum, the ledger should contain the date of the transaction, a description of the transaction and the amount of the transaction. The remainder of the columns, except for the last column, should contain headings by type of expense or income, such as sales income, office expense and marketing. The last column in the ledger book should contain your business current account balance.

Record your current business current account balance in the last column of the ledger book on the first line under the headings. Record the date of the balance and a description such as "Current account balance forward."

Record a date and description for each business transaction on a separate line of the ledger book. Enter the amount of the transaction in the appropriate column. If the transaction was paid for out of the business current account or a deposit was made to the business current account, add or subtract the amount of the transaction from the current account balance on the previous line and enter the revised balance on the line of the new transaction.


If you pay for something out-of-pocket, record the expense in the ledger book and simply carry forward the same balance from the line before for your business current account. Small business owners and independent contractors often pay for business expenses from their personal funds. If you do not have a business current account, then eliminate the last column from your ledger book and use it for an additional expense or income item.

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Things Needed

  • Ledger book, spreadsheet program or spiral notebook
  • Business current account balance
  • Business transactions

About the Author

Kaye Morris has over four years of technical writing experience as a curriculum design specialist and is a published fiction author. She has over 20 years of real estate development experience and received her Bachelor of Science in accounting from McNeese State University along with minors in programming and English.

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