Sales Ledger (or Accounts Receivable)
(or frequently in software known as "Customer Accounts")
On the Balance Sheet there will usually be a balance called "Trade Debtors" or “Accounts Receivable”.
The Sales Ledger has an Account for every Customer. Each Customer Account carries all the transactions for the one Customer:
• Sales Invoices
• Sales Credit Notes
• Payments Received
In accounting software, by recording these three types of transactions, you will get an immediate calculation of the money owed to you.
The accounting software will also allow you to “allocate” or “apply” the money received to the sales invoice it relates to. These are then regarded as “cleared”. Then if you run an “open items” or “unpaid bills” report, you will see just the unpaid bills, rather than all the previous paid bills which is usually a much bigger report, and not frequently needed.
If trading is healthy, many of the Customer Accounts will be carrying balances at any given time, hopefully just the most recent unpaid sales invoices.
As with all Accounts and Ledgers, the transactions will be a debit or a credit.
To make the accounting records complete, the Sales Ledger has to be 'represented' in the General Ledger, even though they themselves are separate ledgers.
This is achieved by the concept of "control accounts". On the General Ledger there will be a control account for the Sales Ledger.
Every time a transaction is recorded in the Sales Ledger (eg. Sales Invoice), an identical record is kept in the Sales Ledger control account on the General Ledger. This is the way that the General Ledger stays in balance.
Read the section on Accounting Controls for checks you can make on the Sales Ledger.