All businesses must keep some sort of ledger book in case a tax collector or an IRS Agent comes knocking. A ledger can be kept in a spreadsheet program such as Microsoft Excel, but the beauty of a physical ledger book is its portability. You can take the ledger home each night or carry it around to investors to give them a picture of how the company is doing financially. It's also wise to keep a ledger book for personal expenses, as sort of a glorified check register.

Step 1.

Draw six vertical lines down the first page of the ledger book, leaving seven columns. Note that some ledger books come prelined, but still can be altered by pen.

Step 2.

Label the seven columns "Date", "Description", "Credit", "Debit", "Balance", "Check Number" and "Approval".

Step 3.

Use the first line in the ledger book to record the starting balance. Under description, write "Starting Balance" (and "Balance Forward" on subsequent pages) and state the starting amount in the "Balance" column.

Step 4.

Record all sales, accounts receivable or payments in the "Credit" column, listing the date and a description in the appropriate columns detailing why money was received.

Step 5.

Record all purchases, accounts payable and paychecks in the "Debit" column, listing the date and a description detailing why money was dispersed. List the check number in the "Check Number" column. Have a manager or bookkeeper initial under the "Approval" column.

Step 6.

Maintain the current balance after each credit and debit transaction to get a picture of where the company is financially and to make sure subsequent check numbers are being used and that no checks are stolen.

Step 7.

Keep receipts for all transactions. Save a check stub for payments out and invoices for payments in. Put these receipts in a manila envelope to accompany the ledger book. File the items away monthly along with a copy of that month's ledger file.


Write down all transactions at the time of transaction. You don't want to be left with days' worth of credits and debits to record at the end of the month.