General Ledger

What Is the General Ledger?

The general ledger (GL) is the central repository of all financial transactions in an organization. Every accounting entry—whether from sales, purchases, payroll, or adjustments—ultimately flows into the general ledger, making it the authoritative source for financial reporting.

The general ledger:

• Contains every financial transaction
• Organizes entries by account
• Maintains running balances
• Serves as the basis for financial statements
• Provides the audit trail for all financial activity

How the General Ledger Works

Double-Entry Accounting

Every transaction affects at least two accounts:

Sold $1,000 of product:
  Debit:  Accounts Receivable  $1,000
  Credit: Sales Revenue        $1,000

Received payment:
  Debit:  Cash                 $1,000
  Credit: Accounts Receivable  $1,000

Debits always equal credits, keeping the accounting equation in balance: Assets = Liabilities + Equity

Journal Entries

Transactions enter the GL through journal entries:

• Standard entries: Recurring transactions (depreciation, accruals)
• Adjusting entries: Period-end corrections and allocations
• Closing entries: Transfer temporary accounts to retained earnings

Account Balances

Each account maintains:

• Beginning balance
• Debits posted during the period
• Credits posted during the period
• Ending balance

General Ledger vs. Subledgers

The GL works with subsidiary ledgers (subledgers) that provide detail:

Accounts Receivable Subledger

• Detail by customer
• Individual invoices and payments
• Summarizes to AR control account in GL

Accounts Payable Subledger

• Detail by vendor
• Individual bills and payments
• Summarizes to AP control account in GL

Inventory Subledger

• Detail by item/location
• Individual receipts and issues
• Summarizes to inventory account in GL

The GL shows totals; subledgers show detail. They must reconcile.

General Ledger Reports

Trial Balance

Lists all accounts with debit and credit balances:

• Verifies debits equal credits
• Starting point for financial statements
• Used for period-end review

Financial Statements

Generated from GL balances:

• Balance Sheet: Asset, liability, and equity accounts
• Income Statement: Revenue and expense accounts
• Cash Flow Statement: Derived from balance sheet changes

Account Detail

Transaction-level detail for any account:

• All entries affecting the account
• Running balance
• Source document references

Common GL Challenges

Data entry errors: Wrong accounts, amounts, or periods

Timing issues: Transactions recorded in wrong period

Reconciliation gaps: Subledgers don’t match GL

Multiple systems: Different ERPs with different GLs

Reporting complexity: Getting data out of the GL for analysis

Modern GL Systems

Today’s ERPs include GL functionality:

• NetSuite: Cloud-native GL with multi-subsidiary support
• QuickBooks: Small business GL
• Sage Intacct: Dimensional GL for complex organizations
• SAP/Oracle: Enterprise GL systems

Each has different:

• Account structures
• Dimension capabilities
• Reporting tools
• Integration methods

How Go Fig Enhances the General Ledger

Go Fig doesn’t replace your GL—it makes it more useful:

Unified access: Connect to multiple GLs and view data in one place

Enhanced reporting: Build reports that span multiple entities and systems

Real-time visibility: See GL data as it’s posted, not just at period-end

Automated reconciliation: Match GL balances to subledgers automatically

AI-powered analysis: Ask questions about GL data in plain English

Excel integration: Sync GL data directly to your spreadsheets

GL Best Practices

1. Close periods promptly: Prevent entries to closed periods
2. Reconcile regularly: Don’t wait until year-end
3. Document entries: Explain the purpose of every journal entry
4. Segregate duties: Different people post and approve entries
5. Review regularly: Monthly review of unusual activity
6. Maintain audit trail: Never delete entries; reverse if needed