The mental model
The ledger has three sides, and on each side it records a running list of entries. Each entry is a single money movement — a charge raised, a receipt taken in, a payment made out, a deposit applied, a correction, or a realized foreign-exchange gain or loss. The balance on a side is the running net of its entries. The three sides:- Receivables — what customers owe the workspace. Charges raised against a customer add to the balance; receipts and applied deposits reduce it.
- Payables — what the workspace owes vendors. Vendor invoices add to the balance; payments out and applied prepayments reduce it.
- Foreign-exchange gain or loss — the realized gain or loss that arises when the rate on the day a foreign-currency invoice is paid differs from the rate that was in effect when the invoice was booked. This side is a profit-and-loss view, not a counterparty balance, and is recorded in the workspace’s reporting currency.
- The balance on a side is always the net of its entries. There is no separate figure kept somewhere that could fall out of step with the entries that produced it.
- An entry is permanent once it is recorded. It is never edited and never deleted.
- Corrections are made by recording a new entry that reverses the one being corrected. Both stay on the ledger; the reversal carries a link back to the entry it cancels, so the audit trail reads in full.
What an entry records
Every entry on the ledger carries the same facts, regardless of which side it sits on:- The side — receivables, payables, or foreign-exchange.
- The kind of movement — see the next section.
- A direction — debit or credit, in the accounting sense; the balance on the side adds or subtracts the entry’s amount according to its direction.
- The amount in the document’s own currency, and the equivalent in the workspace’s reporting currency at the rate in effect on the entry’s date — so a balance can be read either in the original currency or rolled up into the reporting currency.
- Who and what it relates to — the customer or vendor, the order, the invoice or vendor invoice, the receipt or payment, the shipment, and the manufacturing order, where each applies.
- The date the movement happened — the issue date of an invoice, the payment date of a receipt, the day a correction is recorded — kept separately from the moment the entry was written so reporting can be cut by the business date.
- Who recorded it.
- Notes and any external reference number the entry carries.
The kinds of entries
The ledger recognises six kinds of movement. Each one is created by a specific action on a Finance surface; you do not write entries onto the ledger by hand.- Charge raised. A customer invoice (a charge to receive) or a vendor invoice (a charge to pay) recorded against its counterparty. On a customer statement of account this entry appears under the Charge column, and the period’s total appears as Total Charges. This is what opens a new balance.
- Receipt. Money received from a customer and applied to one or more open customer invoices. Recorded on the receivables side.
- Payment. Money paid out to a vendor and applied to one or more open vendor invoices. Recorded on the payables side. Vendor payments only post to the ledger when they are approved — a payment in draft or awaiting approval does not move the vendor’s balance.
- Deposit applied. A customer advance receipt being applied against a customer invoice raised later, or a vendor prepayment being applied against a vendor invoice received later. The application reduces the balance on the side it sits on.
- Adjustment. A manual correction, an opening movement, or any other recorded change that does not arise from an invoice, receipt, payment, or deposit application. Used sparingly; the action is always attributed to the user who recorded it.
- . When a foreign-currency invoice is paid at a rate that differs from the rate it was booked at, the gain or loss is recorded as its own entry on the foreign-exchange side, in the workspace’s reporting currency. The original receivables or payables invoice and payment each post in their own currency on their own side; the realized gain or loss is the third entry that captures the rate movement. See Foreign exchange for the full behaviour, including the re-stamp that runs when an order’s currency is changed.
How balances are read
A balance is always the running net of the entries that make it up. Reading a balance off the ledger is the same operation on every side:- A customer’s outstanding balance — sum of the charges raised against the customer, less the receipts and deposits applied to them.
- A vendor’s outstanding balance — sum of the vendor’s invoices, less the approved payments and the prepayments applied to them.
- The workspace’s realized foreign-exchange result — sum of the gains less the losses recorded on the foreign-exchange side.
How corrections are made
An entry, once recorded, is permanent. You do not edit it, and you do not delete it. A correction is a new entry that reverses the entry being corrected. The reversal has the opposite direction of the original, the same amount, and a link back to the entry it cancels. Both entries stay on the ledger; the balance after the reversal is the same as if the original entry had never been recorded, but the history of what was recorded and when, and what was later reversed and why, reads in full. This is the only way a balance on the ledger changes once the original entry is in. Several Finance actions use the rule directly:- Removing an applied deposit. The deposit application is reversed; the invoice it had been applied against is again open by the amount of the deposit.
- Voiding and reissuing an invoice or a debit or credit note. The original document’s effect on the ledger is reversed; the reissued document posts as its own new entry. See Invoices and Debit and credit notes for the document-level mechanic.
- Correcting a manual adjustment. A reversing adjustment is recorded; the original is kept.
Why every entry is permanent
The ledger is the only record finance can rely on. If a single entry could be changed after the fact, the balance read off the ledger would no longer tell a complete story — a figure that disagrees with the team’s recollection could not be settled by reading the trail. Keeping every entry, and recording corrections as their own entries, makes three things true that matter in day-to-day finance work:- Every balance is reconcilable. A customer’s outstanding figure rolls up cleanly from the invoices, receipts, and applications recorded against the customer. A vendor’s outstanding figure rolls up cleanly from the vendor’s invoices and the approved payments and prepayments applied to them.
- Every change has an author and a date. Each entry — including each reversal — carries who recorded it and when. The audit log on the workspace reads the same history under its business-object view; see Audit log.
- No action erases a number that was once on the ledger. A void, a reversal, or an undo is itself an entry, visible on the ledger and on the reports that read it.
Where you encounter the ledger
You do not open the ledger as its own screen — it sits behind the Finance module and surfaces in everything that reads it:- Receivables and Payables tabs read the per-counterparty balances and the aging that depends on them.
- The Receipts and Offset / Notes tabs record their entries directly onto the ledger.
- The Approvals tab governs which vendor payments and debit and credit notes are eligible to post; an unapproved document never reaches the ledger.
- The Reports tab — the receivables and payables detail reports, the statements of account, the advance-receipt ledger, and the voucher export — reads from the entries on the ledger.