A cash book records any transactions that involve the inflow (receipt) or outflow (payment) of money from a business, and is explained in more detail in our guide, How to Keep a Manual Cash Book.

A sales ledger records each sale the business invoices for during a month, and each payment the business receives from its customers.

A purchase ledger is used to record all the purchase invoices from suppliers and to show those that are still unpaid. It also helps to account for any VAT that the business could claim back if it is VAT-registered.

Sales and purchase ledgers can be maintained in a simple cash book available from any office stationer. Business owners may prefer to use accounting software, but it is still important to understand the basic process of maintaining sales and purchase ledgers.

This factsheet explains what sales and purchase ledgers are and describes how transactions should be recorded in the ledgers.