What is a Business Ledger?

So, what is a business ledger? A business ledger is simply a book in which all the financial movements of a business are recorded. In this ledger, the income, expenditures (expenses), and other financial transactions of the entity are recorded chronologically. This book is like a mirror that shows how much the business earns, how much it spends, and its economic situation in general.

According to the Commercial Code, this book, which must be kept by businesses that meet certain conditions, provides important information to the business owner and the tax office. Keeping a business ledger is not as complicated as it seems. However, some basic rules must be followed:

Systematic Recording: All income and expenses must be recorded regularly, with dates and relevant documents.

Documentary Substantiation: Each entry must be supported by a document such as an invoice or receipt.

Periodic Collection: Periodically (usually quarterly), income and expenses are totaled to calculate the profit or loss for the period.

How to Keep a Business Book?

How to make a business ledger? Although keeping a business ledger may seem complicated, it is quite simple. For each transaction, information such as date, description, document number, and amount should be specified. All income and expenses are recorded in the book in date order. Documents such as invoices and receipts are also kept during these transactions. The business ledger is based on a one-sided recording system. That is, each transaction is recorded only once.

Who Keeps the Business Ledger?

The business book is usually kept by the business owner or accounting staff. However, many businesses today use accounting software to facilitate the bookkeeping process. This software saves time and labor by automating bookkeeping processes.

What are Expenses in the Business Ledger?

It is inevitable for a business to make various expenditures to survive and grow. These expenditures are recorded as expenses in the business ledger. Expenses in the business ledger may vary according to the type, size, and field of activity of the business. However, in general, the following expense items are included in the business ledger:

Rental expenses: Business or office rent

Personnel costs: Salaries, insurance, bonuses

Material expenses: Purchase of materials required for production or service

Energy expenses: Payments for energy sources such as electricity, water, natural gas

Taxes and duties: Taxes such as income tax, VAT and other duties

Why is the Business Ledger Important?

A business ledger is important for a business in many ways;

Tax obligations: The information in the business ledger is used when filing income tax returns, VAT returns, and other tax transactions.

Profitability analysis: The profitability and profitability ratios of the business can be calculated by examining the business ledger.

Budget planning: More realistic budgets can be prepared for future periods by looking at past data in the business ledger.

Getting loans from banks: Banks examine the business ledger to evaluate the business's financial status while lending to the business.

Making decisions about the future of the business: The data in the business ledger is an important resource when making strategic decisions, such as whether the business should grow, downsize, or invest in different areas.

What are the Features of a Business Account Ledger?

The business account book is a book kept according to a simple method. In this book, revenues and expenses are written on separate lines. The business account ledger is a more suitable option for small businesses.

Simplicity: The business ledger has a simpler structure than complex accounting records.

One-sided recording: Income and expenses are recorded on separate pages.

Documentary basis: There must be a document for each transaction.

Chronological Order: Transactions are recorded in chronological order according to the date of execution.

What Should be Considered When Filling the Business Book?

There are some important points to consider when filling out the business ledger:

• All transactions must be recorded completely and accurately.
• Documents such as invoices and receipts should be kept.
• The ledger should be checked regularly.
• There should be more than one copy of the ledger.
• The ledger must be kept by accounting principles.

The business ledger and the business book are often confused concepts. The business ledger records all the financial movements of the business, while the book of business contains the day-to-day activities of the business, customer information, and other important information. The business ledger is a more specific part of the book of business.

Small business bookkeeping can be difficult at first. However, today, many online accounting programs make this job much easier. With these programs, you can easily keep your small business ledger, generate reports and, manage your tax processes.

How to start a business book? There are some things to consider when starting your book of business. First, you should learn about the content of the book of business and the way it is kept. To start a business book, first of all, a notebook or software suitable for the needs of the business should be selected.

Then, basic information such as the name, address and, tax number of the business is written in the book. Finally, the daily activities of the business are regularly recorded. You should update your book of business regularly and enter your employees' details accurately.

A business ledger is a must for every business. This book, which must be kept regularly and accurately for the growth and development of your business, provides important information to both the business owner and the tax office. If you have any questions about how to keep your business ledger, it is useful to get help from an accountant.