What is it?

A Ledger is an accounting term used to describe where the financial transactions of an organization are recorded.

The general ledger is the most common form of ledger, where actual transactions are recorded. However, the University also maintains an encumbrance ledger where outstanding commitments are recorded. Examples of encumbrances would be salary commitments for employees, purchase orders that have been submitted to a vendor but where the goods and invoice have not yet been received or processed, and travel advances that are provided before the travel takes place. Amounts in an encumbrance ledger would reduce the amount available to spend in that particular fund.

A sub-ledger is another form of ledger, which shows the detail for a particular account within the general ledger. The most common forms of sub-ledgers at the University are the accounts receivable (A/R) and accounts payable (A/P) sub-ledgers.  While the general ledger (GL) will have only one total amount for a particular A/R or A/P account, the sub-ledger will contain a more detailed list of all amounts owed to or receivable from a person or company that make up that GL balance.

Why is it important?

Departmental administrators that are responsible for the financial transactions of his or her department are usually required to reconcile their portion of the GL on a monthly basis. Understanding how a GL works and how transactions are processed across the University will allow them to better account for their department’s funding.

Where can I find out more?

To review the transactions in the GL for your operating department or research fund, log into FAST Finance Reporting at www.carleton.ca/fast.