Sales ledger meaning

A sales ledger is the accounting record (and the reporting output from it) that lists a business’s trade receivables (accounts receivable): amounts owed by customers for goods or services supplied on credit. It records invoices issued, credit notes, cash receipts and the outstanding balance by customer, typically producing an aged debtors (ageing) report of unpaid receivables. In legal practice it is used to: - evidence and verify book debts for assignment or security in factoring, invoice discounting and asset-based lending, including borrowing base and concentration tests; - support warranties, representations and disclosure in M&A and commercial contracts; - assist insolvency office-holders in identifying, valuing and collecting receivables; and - evidence quantum in debt recovery proceedings. “Sales ledger” is not defined in legislation or case law; it is a descriptive accounting term, sometimes defined in contracts (for example, facility agreements). Usage and meaning are broadly consistent across England & Wales, Scotland, Northern Ireland and Ireland, where it is also called the debtors ledger or receivables ledger. Key features: it is a subsidiary ledger that should reconcile to the general ledger control account. Its accuracy, regular reconciliation and clear identification of disputes, set-offs, credit limits and overdue balances are material to enforceability and valuation of receivables.