How to Keep a Store Sales Ledger

A sales ledger alerts you of overdue accounts.

To run a store, cash flow is vital in order for you to be able to place orders for your goods. Healthy cash flow is a result of customer accounts paid on time. A sales ledger helps you manage invoices. It reminds you when a customer's account is overdue and keeps track of how much money you are making. The sales ledger is a vital bookkeeping function for your business and easy to manage.

Things You'll Need

• Invoices
• Sales Ledgers

Instructions

1. Prepare invoices to formally request payment from your customers for goods or services that your business supplied as per the agreed payment terms. Use your company stationary. Include your Employer Identification Number.

2. Record every invoice you issue. Retain a copy of each invoice. Record on the sales ledger the date on the invoice, customer's name, invoice number, amount paid and date received, amount outstanding, taxes, and the date the invoice was paid.

3. Start a new page on the sales ledger for each month. Ensure that the invoices to your customers go out on time. Ensure that invoices for contractual terms, including fixed monthly fees or payments in stages, are correctly recorded.

4. Retain a copy of the invoices that you have sent out. File the invoice copies in order of their invoice number.

5. Produce an aged list of balances on the sales ledger showing the amount owed by each customer and the age of the account. Use the sales ledger to monitor overdue accounts and control credit.

6. Review which invoices are still outstanding. Send out reminders to customers who are behind on payments to let them know that you are paying attention to their account and that payment is due immediately. Provide options for acceptable methods of payment.

Tips & Warnings

• With a well-maintained sales ledger, you may be able to factor your invoices to obtain an advance to boost your cash flow for your business. If maintaining your store sales ledger is taking up too much of your time for you to manage effectively, you could consider outsourcing the service to a private company.

• Ignoring your sales ledger can result in nonpayment from customers, which could compromise your cash flow position. An accurate sales ledger is critical to your business. Asking for a payment on an invoice that has already been paid is unprofessional and may indicate that your business's operations are inefficient.

References

• Acumen Accounting: Sales Ledger
• Intrum Justitia: Sales Ledger Services
• Q Finance: Efficient Invoicing Procedures

Resources

• Credit Management Handbook; Burt Edwards