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HomeProductsAccountingGeneral Ledger and It's Benefits For Your Company

General Ledger and It’s Benefits For Your Company

Recording transactions that occur in a certain period is the most important thing for a company. Without any transaction record, a company can’t notice the transactions that happen in a certain period. If a company does not know about any transactions in a certain period, there might be fatal consequences, such as corruption crimes to the company bankruptcy.

Hence, A company can use a general ledger as a medium to record all transactions. Did you know the meaning of it? This article will provide information to the readers about the definition and benefit. before that you also need to know that part of the ERP software can help overcome this.



General Ledger Definition


A general ledger is a medium to record financial transactions, both debit or credit accounts, that appear in a certain period. In other words, this also have a definition as a book owned by a company that contains company transactions records.

One of the experts from Indonesia, Ahmad Manarul Hakim expressed his opinion on the definition of a general journal. According to him, it’s like a book or special form that used to record all financial transactions chronologically that refer to the transaction date involving the transaction details. Thus, It can be name, account type, and nominal of balance in both debit or credit columns.

Also read: Financial Statements: Definition, Functions, and Examples

Principles in Compiling a General Ledger

Several principles are important to know in compiling a general ledger. It is necessary to identify the company’s financial transactions proof, invoices, and receipts in compiling it. The accounts should be divide and categorize into several types such as capital, debt, or property.

Furthermore, there should be a determination in a ledger for debit and credit accounts that related to the transaction. The most important thing in compiling it is to record all transactions according to the proof of the transaction.

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download skema harga software erp

General Ledger Benefits

A general ledger has various benefits for the company. Through this, a company will get information about the accounts changes. In addition, a company can know the debit and credit balance. The presence of a ledger can also give information about the balance amount that recorded in one or more account. Furthermore, a ledger can be a reference to find out a transaction has been posted to the general ledger or not.

General Ledger Functions

It has several functions, ranging from informative, historical, instruction, recording, and analyze function. Here is the explanation of each function:

Informative function

First, it provides many information and explanations of the transaction recording by a company.

Historical function

All transactions that a company conducts are recorded in a ledger based on the transaction date. Consequently, It provides company transaction every day continuously.

Instruction function

Process of inputting data into a ledger can be said as an instruction function. The recording in it is not only recording the transaction documents that occurs, but also being a debit or credit command.

Recording function

In a general journal, all transactions that occur in the company must be recorded. In deed, it is essential to record first the wealth, costs, capital changes, and income into it.

Analysis function

In a general journal, there are a transaction recording that are resulting from transactions analysis in the form of debits and credits that are affect. As a result, this analysis include the classification of account names, debit or credit records, and the number of transactions. this can be handled well by the ERP system.

Several Steps in Compiling a General Ledger

In compiling a ledger, a company must follow several steps to get ease on it. Collecting the proof of transactions is the first step in compiling it. The period of transaction proof can be within a month or in a certain period.

Finally, to analyze all the company transactions is the next step of compiling it. Where this analysis aims to get information about the effect of transactions. Besides, this analysis also aims to make a basic accounting equations. In compiling a ledger, it is also necessary to make adjustments of transactions that made by a company.

Example of General Ledger

Here is an example of a general journal that a company use in recording all transactions:

general ledger


In short, a general ledger is being a medium to record all company transactions. Through this, a company can know all the transactions in a certain period. Moreover, It also have various functions that make easy a company in transactions recording. One of them is informative function.


HashMicro as a leading ERP Software vendor provides convenience for your company to automatically make a general ledger with Accounting Software that is supported by top features. Nowadays, many companies are trusting HashMicro to increase their operation effectiveness. Contact us now to get the best offer and free demo.

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