What is the Sales Ledger Control Account?
The balance on the Sales Ledger control account also referred to as Trade Debtors control account should equal the balances on the individual customer accounts
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The sales ledger control account is also known as the ‘trade debtors control account’ and is part of the balance sheet. This account shows at any given time how much your customers owe you and your company.
A control account is used as part of the double-entry bookkeeping method, wherein a credit and debit entry are made for each transaction.
Purpose of a sales control account
The sales ledger control account is used to monitor the amounts owed by customers to your business. The complementary account is known as the purchase ledger control account, which records the amounts owed by your business to suppliers, for example.
All the individual transactions posted to your customer ledger cards so invoices, credit notes and receipts are reflected in this account.
A control account is used to double check the totals that appear in the balance sheet and in particular financial reports. Any differences should be investigated.
Sales control account in accounting
This account should be reconciled each month end making sure it reflects the same balance at the same time as your Aged Debtors Report which shows the individual balances outstanding per customer.
In order to ensure that the amounts in the sales control account add up, they are reconciled, typically by an accountant who can look into any discrepancies that might appear across the financial records of the business.
Sales control account in accounting software
Accounting software with the ability to create and manage various control accounts is available today, however, software with this type of capability is generally designed for use by accountants or those with professional accounting knowledge.
Fortunately, online accounting software today that is designed for freelancers, small businesses, and generally those just starting out looking for an easy way to stay on top of their accounting provide a simplified version of the main accounting requirements.
With Debitoor accounting & invoicing software, the double-entry bookkeeping approach is built in, making it easy to add expenses, register payments, and create & manage invoices all in one place.