What Is an Expense Ledger?

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  • Written By: K. Kinsella
  • Edited By: Shereen Skola
  • Last Modified Date: 14 September 2019
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An expense ledger is a document used by bookkeepers and accountants to detail expenses incurred by an entity or individual. Typically, an expense ledger details transactions that occur with a specific period of time such as a week, month, quarter or year. In many countries, businesses are required by law to maintain expense ledgers so that the government can prevent and detect illegal activities such as money laundering or corporate embezzlement.

These may take the form of a book, a single sheet of paper or an online document or software application. An expense ledger is normally laid out in a spreadsheet with a series of headers listed across the top of the document that break the financial transaction down into a number of sections. Typically, the different sections of a ledger record information such as the type of payment being made, the name of the payment recipient and the date of a transaction. The ledger also usually includes a place for invoice numbers to be recorded along with the check stub numbers of reference codes for electronic payments.


A ledger must include a running expense total and this normally appears on each line alongside each recorded expense. The bookkeeper typically compares the updated expense total with expenses listed on bank statements to ensure that transactions are accurately recorded. In some instances, a transaction may appear on the ledger long before it appears on the bank statement since it can take several days for checks and other types of transactions to be processed. The bookkeeper is usually responsible for reviewing outstanding transactions until all items have cleared the bank.

In some nations, business owners and individuals can claim certain types of expenses as tax deductions. Generally, the tax authorities require some kind of evidence to support these claims. Therefore, copies of the expense ledger along with supporting documentation such as receipts and invoice are sometimes submitted to the tax authorities. In certain countries, tax officials can audit taxpayers for prior tax years. Consequently, there are existing laws in many countries requiring people to keep financial documents such as ledgers on file for a number of years.

On occasions, businesses and individuals may become involved in disputes over outstanding payments. A lost check or a misdirected electronic payment can result in a service provider not receiving payment. Business owners and individuals that maintain an expense ledger can easily resolve such issues by providing information to the service provided such as the amount of the payment and the date that the payment was made. Bookkeepers can run into legal issues with both tax authorities and other vendors when payments are lost or misdirected and expense ledgers are not maintained.


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