What is a general ledger, and what can it tell you?

The general ledger is the master record of a business's accounts. Every transaction is posted to it under double entry, once as a debit and once as a credit, and each account (sales, rent, the bank, VAT, a loan) keeps a running balance. In the UK it is often called the nominal ledger.

It matters because everything else is built from it: the trial balance lists its closing balances, and the profit and loss and balance sheet are drawn up from those. LedgerIQ reads the general ledger export itself, which is why it can show not just the figures but the entries behind them.

Each account is a list of the entries posted to it: the date, a reference to the source document, a description, the debit or credit, and the balance after each line. A general ledger report or export puts every account one after another. The sample below is one account, rent, for part of a year: two quarterly invoices debited, then a journal crediting the part paid in advance, leaving the balance that goes to the trial balance.

In everyday UK use there is none: Sage calls it the nominal ledger, Xero and QuickBooks call it the general ledger, and both mean the full set of accounts the statements come from. Strictly, the nominal ledger is the impersonal accounts (income, expenses, assets, liabilities and capital), while each customer's and supplier's account sits in the sales and purchase ledgers and reaches the nominal ledger only as a total, through the debtors and creditors control accounts.

A subledger holds the detail behind one general ledger account: every customer in the sales ledger, every supplier in the purchase ledger, every asset in the fixed asset register. The general ledger carries only the total, in a control account. The two should always agree, and checking that they do is a control account reconciliation, covered in the reconciliation FAQ.

The general ledger is every transaction, account by account. The trial balance is one line per account: its closing debit or credit balance, listed to prove that total debits equal total credits. A trial balance can balance and still be wrong, for example when an entry is posted to the wrong account or missed out entirely, which is why analysis that looks for anomalies needs the ledger rather than the trial balance. LedgerIQ takes the general ledger and builds the trial balance from it.

Assets (what the business owns or is owed), liabilities (what it owes), equity or capital (what belongs to the owners), income (sales and other revenue) and expenses (the costs of earning it). The first three make up the balance sheet; income and expenses make up the profit and loss, and their net result is carried into equity at the year end.

They are the traditional rules for deciding which side of an entry is the debit. For personal accounts (people and organisations), debit the receiver and credit the giver. For real accounts (assets), debit what comes in and credit what goes out. For nominal accounts (income and expenses), debit expenses and losses and credit income and gains. Most UK bookkeepers now learn the same logic by account type: assets and expenses increase with a debit; liabilities, capital and income increase with a credit.

Checking each balance in the general ledger against independent evidence: the bank account against the bank statement, the debtors and creditors control accounts against the sales and purchase ledgers, VAT against the return, loans against the lender's statement, fixed assets against the register. Bank Reconciler does the bank part; the rest is part of the month-end and year-end review.

A general ledger code, also called a nominal code or account code, is the number that identifies an account, so every transaction is posted to the right place and every account lands in the right line of the statements. General ledger coding is choosing the code each transaction posts to. Codes are grouped in ranges, and the full list of codes and names is the chart of accounts: the chart of accounts defines the accounts, while the general ledger records what is posted to them. In a typical UK chart of accounts, such as Sage 50's default, the 4000s are sales, the 5000s purchases and the 7000s overheads, so 4000 is sales and 7100 is rent. Xero's default chart uses three-digit codes instead, with sales at 200.

In your accounting software's chart of accounts: under Accounting in Xero, under Transactions in QuickBooks Online, and under Nominal codes in Sage 50. Each lists every code, its name and its type, and most will export the list. Starting from scratch? See the chart of accounts template.

Enough for someone else to post to it correctly and to read it on a report: what it holds, in plain words ("Rent of business premises", not "Misc 2"). On individual entries, the description should say what the transaction was and who it was with, and carry the invoice or reference number. Clear descriptions are also what let LedgerIQ classify an account and spot an unusual entry without asking.

A spreadsheet ledger works for a very small business: one tab per account, or one list with an account code column, a date, a reference, a description and separate debit and credit columns, with a running balance. It needs discipline to keep both sides of every entry. Accounting software keeps the ledger for you, and LedgerIQ analyses its export. For statements laid out from your own figures, try the free profit and loss template and balance sheet template.

This is general ledger mapping: it classifies each account from its name, code and type into its place in the statements: fixed or current assets, current or long-term liabilities, equity, revenue, cost of sales or overheads. Where a name is ambiguous it asks you, and RiQ can give a second opinion on the mapping. You can change any classification, so an unusual chart of accounts still produces correct statements.

A short pack, usually monthly: a profit and loss for the month and the year to date against budget or last year, a balance sheet, a cash flow summary or forecast, a handful of key figures such as gross margin, debtor days and cash, and a page of commentary explaining what moved and why. There is no prescribed format, because they are for the business's own decisions, but a management accounts report template usually runs: summary KPIs, profit and loss against budget, balance sheet, cash flow, commentary. For a worked example, see what are management accounts.

Monthly is the common rhythm, because it is frequent enough to act on and fits the monthly bank reconciliation and payroll cycle; quarterly suits a smaller, steadier business. A monthly pack usually includes the profit and loss with comparisons, the balance sheet, cash and working capital, budget against actual, and commentary. LedgerIQ's period controls run the same analysis for a month, a quarter, the year to date or the trailing twelve months.

Xero has a management report and the standard reports a pack is built from. What it does not do is the analysis around them: ratio trends, forecasts, anomaly checks and a written narrative. LedgerIQ reads Xero's General Ledger (Detail) export, exported as CSV from Accounting, Reports, and adds those, along with a board pack you can brand for each client.

The figures all come from the general ledger: income and costs for the profit and loss, balances for the balance sheet, and the bank and working capital movements for cash flow. Around them go the comparatives (last month, last year, the budget), a few key figures and commentary. Assembling that by hand means refreshing a spreadsheet every month; LedgerIQ draws the statements and comparisons from the ledger export each time, and its cash flow forecast and expense analysis modules download as Excel workbooks. For a template to build your own, see the LedgerIQ guides, and the free cash flow forecast template.

A board pack is the set of papers a board reads before it meets: the financial performance, the position and the risks, summarised so directors can decide. LedgerIQ's board pack opens with an executive summary of key figures and any risk flags, then the profit and loss, balance sheet and key ratios, revenue against expenses, monthly performance and seasonality, revenue streams, the expense mix and top expenses, and cash and liquidity, in your branding. Running the sample analysis produces one from a demo company.

Reports in accounting are the summaries drawn from the ledger, whether statutory accounts for outsiders or management reports for those running the business. Management reporting is the internal information managers use to run the business, as opposed to the statutory accounts filed with Companies House and HMRC. Common reports are the budget against actual with variances, the cash flow forecast, a KPI dashboard, aged debtors and creditors, and profitability by product, customer or department. LedgerIQ covers the financial ones from the general ledger: budget against actual, cash forecasts, the financial dashboard, receivables and payables, and margin and revenue analysis.

LedgerIQ is general ledger analysis software: financial analysis that works from a general ledger export. It draws up the statements, runs 44 analysis modules (ratios, trends, forecasts, valuation and forensic tests), puts a financial dashboard on top and writes a board pack, with every figure traced back to the transactions. It is part of ReconcileIQ.

A transaction-level general ledger export as CSV or Excel (.csv, .xlsx or .xls): every entry with its date, account and amount, plus the account code, name and type where your software includes them. It does not take a trial balance, because a list of closing balances cannot show seasonality, anomalies or the entries behind a figure.

LedgerIQ recognises these four exports. Xero: Accounting, Reports, General Ledger (Detail); choose the dates and export as CSV. QuickBooks Online: Reports, General Ledger; set the dates and export to Excel or CSV. Sage 50: Nominal codes, Reports, Nominal Activity; output to CSV. Pandle: Reports, All Reports, General Ledger; choose the dates and export as CSV. Make sure the export includes the transactions, account codes, names and types.

LedgerIQ reads the general ledger exports from Xero, QuickBooks Online, Sage 50 and Pandle, and from IQ Books directly. Exports from other systems are not yet recognised. It works from the export rather than a live connection, so there is nothing to authorise.

Yes. "See it work on sample data" runs the real analysis, free, on a demo company, Kestrel Precision Engineering Ltd, so you can open every module and the board pack before you upload anything.

No. LedgerIQ runs in the browser, in any current version of Chrome, Edge, Firefox or Safari, on Windows, Mac or Linux. Sign in and upload the export.

Yes. In IQ Books, Reports, Analysis opens LedgerIQ on the organisation's own ledger, with no export needed, at the same 1,000 credits a full analysis.

Forty-four, in seven groups: financial statements, profitability, financial health, trends and forecasting, advanced tools, valuation and risk, and forensic. They run from the trial balance, profit and loss and balance sheet through ratios, DuPont, break-even and forecasts to business valuation, credit risk and the forensic tests. The features page lists every module.

Liquidity (current and quick ratios, working capital), gearing and leverage (debt to equity, debt to assets, interest cover), returns (return on assets and on equity, with a DuPont breakdown), margins (gross, operating and net), efficiency (asset, inventory, debtor and creditor turnover and the cash conversion cycle), plus the Altman Z-score and Piotroski F-score. Each shows its formula and its trend. For the formulas themselves, see financial ratios explained.

It fits several methods to the monthly history, including a trend, a damped trend, a seasonal model and a blend of models, and shows the method, a confidence band and cautious, base and ambitious scenarios rather than a single number. A full seasonal fit needs at least 24 months of history; with less, LedgerIQ says so.

Yes, as an estimate with its assumptions shown: EBITDA, revenue and SDE multiples by industry, capitalisation of earnings, a discounted cash flow with a Monte Carlo simulation of 10,000 runs to give a range, and a net asset view. It is an analysis to support a conversation, not a formal valuation. For a quick figure, try the free business valuation calculator.

RiQ is the ReconcileIQ assistant. Ask in plain English and it opens the right module, explains the figures (what a ratio means, what moved it, what to look at next) and drafts the narrative for a report. The numbers come from the modules' calculations; RiQ explains them rather than working them out.

A PDF report you compose from any module's charts, tables and commentary; the same report as a Word document or a PowerPoint deck; a PDF board pack; Excel workbooks from modules such as the cash flow forecast and expense analysis; and any chart as a PNG or SVG image or its data as CSV.

Yes. Practices can keep a brand profile for each client, schedule reports to be sent, and share a report for the client to read and comment on.

A full analysis is 1,000 credits, and reopening the same period in the same session is free. The free tier is permanent, with no card and 1,000 one-off credits, shared across ReconcileIQ (email sign-ups unlock them by confirming the address), enough for one full analysis. Starter, at £5 a month, adds 5,000 credits a month. See pricing.

The ledger file is read and analysed in your browser, and detailed transaction data is not kept beyond the session unless you save a snapshot. Some steps do use our servers. While accounts are classified, their names, codes and balances are sent to RiQ for a second opinion; transactions are not. When you ask RiQ about a module, or generate a board pack narrative or a forensic write-up, the figures involved are sent to RiQ to write the text. Reports you render as PDF, Word or PowerPoint, schedule or share are built and delivered from our servers, encrypted with AES-256. In IQ Books, the ledger already lives on our servers.