General ledger

General ledger

Author: Eli Kramer
Read time:  2 minutes
Published date:  July 2, 2024
A general ledger is a recordkeeping tool used by accountants and financial officers. Learn how companies, funds, and other businesses use a general ledger to maintain accurate finances.

Private companies, nonprofits, partnerships, and most other types of incorporated legal entities all have something in common: They have bills to pay—including taxes—and they receive various types of revenue to pay those bills. A general ledger is a tool that accountants and company financial officers use to manage, record, review, and report on these transactions. 

What is a general ledger?

A general ledger (GL) is the centralized record of all a company’s financial transactions. It reflects all debits and credits across each of the company’s accounts. A GL typically contains information from several subledgers for individual accounts, including bank accounts and equity holdings. 

Transactions recorded in a general ledger identify the type of transaction, the relevant account, the amount and date of the transaction, and a code used to identify the type of credit or debit to that account. They also usually include a field to list the name of the vendor being paid and an additional field for any notes on the transaction. 

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What is a general ledger used for?

While not strictly necessary for most business operations, a general ledger can help finance teams and business leaders save time and make more informed decisions. Functions of a general ledger include:


The main function of a general ledger is to be a central source of truth for all a company’s financial transactions. 


If the balance of a subledger doesn’t match a figure provided by an external source, like a bank statement, the general ledger can help reconcile the discrepancy. 

Decision-making and budgeting

An up-to-date GL provides a snapshot of the company’s financial position. An accurate and complete GL allows company leaders to create a realistic budget and make decisions based on data-driven projections of liabilities and income.

Financial reporting

Finance teams can use an up-to-date GL to generate financial statements, such as balance sheets and income statements. 


An accurate general ledger provides auditors with a source of truth for company finances. Auditors use the general ledger to identify individual transactions and ensure they have been recorded correctly. During an audit, an auditor also evaluates the completeness of a company’s records. This means ensuring that every transaction from every subledger for an individual account also appears in the company’s general ledger. Auditors evaluate accuracy and completeness to certify the financial integrity of the company and protect against fraud.

Private fund general ledger

Like other complex businesses, a private fund uses a general ledger to balance its books. If the fund is audited, auditors will expect access to an up-to-date general ledger. Private funds also deliver periodic financial statements to their investors. The fund’s GL provides the basis for these financial statements. 

For many limited partners (LPs), receiving and reviewing these quarterly statements is one of the only times in the year they think about the fund or its general partners (GPs), so it’s important for fund managers to present timely and accurate information about their finances. Institutional investors increasingly request more detailed, bespoke reporting from GPs—which makes real-time reporting from an automated and connected general ledger a competitive advantage for fund managers.

Author: Eli Kramer
Eli Kramer has over decade of experience working in venture capital and private equity fund administration. Since joining Carta in 2018, he's worked closely with the fund administration and product teams to provide expertise for creating Carta's best-in-class, software-lead solution to fund administration.
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