What Is a Payment Ledger?

Article Summary:

A payment ledger is a bookkeeping tool used to track, record, and organize payments. It can be used to track when payments are due, if payments have been made, and so on. Payment ledgers can help a business keep track of its costs and spending.

Perhaps you started your own small business, and now it’s growing into a larger one. Or maybe your school is throwing a charity event to earn money for school supplies. In both these situations, and many more, it is important to keep track of how much money you’re spending and what you’re spending it on.

A payment ledger is designed to help you keep track of your payments. This includes when they’re due, what transactions have been made, and how much you’ve spent on a certain event. Payment ledgers are a bookkeeping tool and can greatly help an organization run smoothly. Companies use payment ledgers to track monetary transactions for daily spending, or for special events.

What is a payment ledger?

A payment ledger is a bookkeeping tool used to record and track payments. Payment ledgers are usually used to track the expenses of a certain project or the daily costs to run a company. They can also be used to see when payments are due and if they have been made or not.

For example, a company could use a payment ledger to track its monthly electric bill. Staff would write down how much the business owes and when it makes payments. The company can also use a ledger to note if a bill is overdue or a payment has been denied. This allows the company to keep track of what has been paid and what still needs to be paid.

Who uses payment ledgers?

Even if you are not required to use a payment ledger to track expenses, doing so can benefit any person, organization, or event that makes monetary transactions. This could range from an individual landlord to a multimillion-dollar industry. If money is being spent, a payment ledger can help anyone document those payments.

Payment ledgers, then, are a money management tool useful to both individuals and businesses alike. There are also other tools available to help you manage your money wisely and make it grow over time.

What is a payment ledger used for?

Simply put, payment ledgers are used to track any sort of transaction or expense owed. They can be used for one-time events, such as fundraisers or parties, or everyday expenses.

How to use a payment ledger

Here are a few examples of how a person or company may use a payment ledger:

  1. Landlords may use a tenant ledger to track whether tenants have made their monthly rent payments. Property owners can also use this ledger, a type of payment ledger also called a rent ledger, to note if any tenant’s payment is past due or has processed correctly.
  2. A property manager could use a payment ledger to track how much maintenance expenses are each month.
  3. Churches and schools could use a payment ledger for fundraisers. The payment ledger could show how much money the organization spends to make a fundraiser happen, and how much it earns from the event.
  4. A business could use a payment ledger to track bills owed, such as gas or electric bills. This can help the company avoid late payment fees and ensure everything gets paid on time.
  5. An organization might use a payment ledger to track expenses around a birthday party for a staff member. The ledger could show how much money the group spent on the party, helping organizers make sure to pay everything back.
  6. If a company throws an annual holiday celebration, it may use a payment ledger to document expenses surrounding the event. The payment ledger can also help event organizers make sure they aren’t in any debt and have paid off everything they might owe. For example, if the company rented out a room for the party, the ledger can track how much the room cost and if the payment has been made.
  7. To keep track of how much money they are spending on supplies, medical office personnel could use a payment ledger to document what supplies they are buying the most and how much those supplies cost each month.

What’s in a payment ledger?

The information contained in a payment ledger can vary a lot depending on each case. Payment ledgers can include just basic information, or they could be more detailed. It really just depends on the company’s needs and requirements.

Key info to include in a payment ledger

Here’s a list of important information that is good to include on a payment ledger:

  • Client information, such as the name and address of the client. The information documented may look different based on the clientele and job type. For example, the client information in an office manager’s payment ledger will look different than client data in a landlord’s tenant ledger.
  • Associated transactions. Any payments made between you and the client should be documented on a payment ledger. You can also use this to calculate your monthly recurring revenue by including other payments made by the same client on the same payment ledger.
  • Payment dates. This includes payments’ due date and the dates when payments are made.
  • Payment types. If you fulfill a payment using a credit card, PayPal, or bank transfer, be sure to document this is the ledger. Doing so can help you keep track of any transfer fees you may be charged when paying.
  • Payment status. This documents if a payment needs to be made, is pending, or is past due. You can also use this section to document if your payment fails or if you are given a refund.
  • Transaction numbers. These are a great way to quickly find entries in your payment ledger if the link to access it (assuming you use a digital ledger) gets overwritten or lost.

Reasons to use a payment ledger

Payment ledgers are a great way to keep a company’s expenses organized, but there are a few other benefits to it, as well. Here are a few reasons you may want to use a payment ledger:

Find payment issues. Making sure all payments are made and processed smoothly is essential to a business running effectively. A payment ledger is a great way to highlight payment issues right as they occur, so you can solve them before they become a bigger issue.
Prevent late fees. Payment ledgers are a great way to keep track of when payments are due, and if they’ve been made or not. Keeping track of whether or not a payment is made and when the due date is can help you avoid late payment fees and make sure everything is submitted on time.
Identify inconsistencies in payments. As a business grows, so does the number of transactions made. A monthly bank statement or eyeing your bank account may be enough to identify inconsistent payments with a small company, but a large one may benefit greatly from a payment ledger.
Find ways to improve your financial performance. Perhaps you’re spending too much money on a certain product, or maybe the transaction fee for a payment method is rather costly. Payment ledgers are a great way to see where you can cut costs and build revenue.

Pro tip: prudent money management isn’t just for business

“This all sounds like great advice for business owners,” you say, “but what about me personally? How can I benefit my personal finances in the same way?”

So, do you want to accomplish all the above things with your personal finances? There are a few tools you can use to do so. Check out SuperMoney’s list of 25+ Free Spreadsheet Templates. These can help you manage your daily finances, and maybe even show you how you can improve your personal financial performance.

If your main concern is managing your high and rising net worth, comparing reviews for wealth management services and tools could also be well worth your time.

How to make a payment ledger

There are plenty of free payment ledger templates online that you can access. You can also use something as simple as an Excel spreadsheet. Excel is a great tool that can help you easily organize information and even calculate data. There are even a few tutorials online to help you make a payment ledger on Excel.

If you prefer open source software, the LibreOffice suite offers Calc as an alternative to Microsoft Excel. At least one SuperMoney editor has replaced Microsoft Office entirely with this open source product.

FAQ

What is the purpose of the ledger?

The purpose of a payment ledger is to help keep track of a company’s monetary expenses. Company staff can use a ledger to track day-to-day transactions for a certain event.

Which transactions are recorded in a ledger?

It depends on whether the company is using a ledger to track daily expenses or just the expenses of a one-time event. Generally speaking, however, ledgers record payments between clients, money earned, money spent, and money owed.

Why is it necessary to prepare a ledger?

A ledger may not necessarily be mandatory, but it is a valuable resource. Ledgers help you make sure all payments are made in full and on time. They also can help you see where you’re spending too much and where you can save money.

Key takeaways

  • A payment ledger is a bookkeeping tool used to record and track payments.
  • Payment ledgers are used to track daily spending or the amount spent for a specific event, such as a fundraiser.
  • The client information, payment date, payment type, and payment status are all data that will likely be found on a payment ledger.
  • A payment ledger can help you remember when a bill’s due date is, keep expenses organized, and improve your financial performance.

Learn more ways to organize your finances

A payment ledger is a great way to keep finances organized, but it’s not the only way. If you’re interested in more ways to organize your finances, check out SuperMoney’s 10 Simple Ways to Organize Your Finances & Stay in Control. These tips can help you build security around your finances and help improve your financial life.

View Article Sources
  1. 5 Payment ledger benefits for SaaS & subscription businesses — Profit Well
    An interesting article on the value of payment ledgers to a specific industry by specialists in that industry.
  2. Calc — The Document Foundation
  3. Can a potential landlord ask for a payment ledger from my previous landlord in order to let me complete a rental application? — Avvo
  4. Payment Ledger definition — Law Insider
  5. Payment Ledger Demonstration in Participant Billing and Project Manager Payments Workshop — Oregon Community Solar Program
  6. Rash v. Metro Basic Foods C.A. No. 06A-01-002 JTV — Delaware Courts
    A properly maintained payment ledger can even prove useful in court.
  7. What is LibreOffice? — The Document Foundation
  8. Useful background articles by accounting professionals and business finance sites — Various
  9. 7 Easy Steps to Create a Successful Budget — SuperMoney
  10. 10 Simple Ways To Organize Your Finances & Stay in Control — SuperMoney
  11. 25+ Free Spreadsheet Templates To Manage Your Daily Finances Effectively! — SuperMoney
  12. Can I Use a Personal Loan to Fund My Small Business? — SuperMoney
  13. What Is Petty Cash and How Does It Work? — SuperMoney