How to Make a Budget Ledger

A budget ledger differs from a budget based on the fact that the former is an updated document, while the latter is a forecast. While there are no universally accepted definitions for these financial documents, business people frequently use the word budget to describe a guidance document and the word ledger to describe a tracking tool. To create a budget ledger for your small budget, use a document that tracks results monthly and projects annual or quarterly performance.

Things You'll Need

  • Spreadsheet or budget software
  • Income and expense projections


    • 1

      Categorize and list your income sources. Include income from sources such as sales, interest, stocks, royalties or other expected revenues.

    • 2

      Categorize and list your expected expenses. Divide expenses into fixed and variable expenses. Fixed expenses stay the same, such as rent, salaries and insurance premiums. Variable expenses change regularly, such as utilities, office supplies and wages of hourly workers.

    • 3

      Create your budget, entering your income and expenses down the left-hand side of the document. Skip a line after the final item in each category and add a “Total” line to show the sum of your income and expenses each month. Add a “Net Income (Loss)” line one or two spaces after you have completed these entries. Show the difference between your net income and expenses on this line each month, and for the year.

    • 4

      Add a “Budgeted Monthly” column heading, followed by an “Actual Monthly” column, the months of the year and “Budgeted Annual” and “Actual Annual” columns running across the top of the document.

    • 5

      Create a formula in your spreadsheet that totals each month’s income and expenses at the bottom of the Monthly Actual column to show how you are doing compared to your projections. Your formula should allow you change the number by which you divide your income and expenses each month. For example, at the end of February, your Actual column should show your total income and expenses divided by two. In March, you will change the formula number to divide your numbers by three.

    • 6

      Enter your projected figures in your Budgeted columns. Enter your actual income and expense numbers in the monthly columns as they occur, and change the divider number in the Actual column each month.

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