What Is a Ledger?

What is a ledger?

A ledger is a record of financial transactions grouped by account. Each account (cash, sales, fees, what customers owe) shows its debits, its credits and its balance.

Transactions reach the ledger in two steps. The IRS puts it simply: "A journal is a book where you record each business transaction shown on your supporting documents. A ledger is a book that contains the totals from all of your journals."1IRS, Publication 583, Starting a Business and Keeping Records, Bookkeeping System (read October 14, 2026)

• General ledger. All of a business's accounts in one place. Financial statements are built from it.
• Sub-ledgers. The detail behind one general ledger account, like a line per customer behind "accounts receivable." Their total must match that account.

Most ledgers use double-entry bookkeeping: every transaction is recorded as a debit in one account and a credit in another, so total debits always equal total credits.1IRS, Publication 583, Starting a Business and Keeping Records, Bookkeeping System (read October 14, 2026)

Your processor balance is a ledger

When you sell online, your payment processor keeps a ledger of the money it holds for you. At Stripe, every movement in or out of your balance creates a balance transaction: a charge, a refund, a payout, or an adjustment such as a dispute.2Stripe Docs, Balance transaction types (read October 14, 2026) Each one carries a gross amount, a fee and a net amount, where net equals amount minus fee.3Stripe API reference, The Balance Transaction object (read October 14, 2026) Stripe also runs an internal system called Ledger, "an immutable and auditable log" based on double-entry bookkeeping, to track money across the company.4Stripe engineering blog, Ledger: Stripe's system for tracking and validating money movement, February 16, 2024 (read October 14, 2026)

Here is how one card sale lands in your own books.

Illustrative example (made-up numbers, sales tax left out): a $100 order, $3.20 processing fee.

Debits equal credits on each date, and the processor balance goes back to zero once the payout lands. Matching those lines to the processor's report is reconciliation. To read the fee lines themselves, see how to read a merchant statement.

Ledger balance vs available balance

On a bank account, "ledger" means something narrower. The CFPB explains it this way: "The account balance that is not reduced by any holds from pending transactions is often referred to as the ledger balance." The available balance "is generally the ledger balance plus any deposits that have not yet cleared but are made available, less any pending (i.e., authorized but not yet settled) debits."5CFPB, Consumer Financial Protection Circular 2022-06, Unanticipated overdraft fee assessment practices (read October 14, 2026)

Processors draw a similar line. Stripe first shows a payment as a pending balance, less its fees, and it becomes available based on the settlement timing of the transaction.2Stripe Docs, Balance transaction types (read October 14, 2026) Each balance transaction says which one it is in its status field.3Stripe API reference, The Balance Transaction object (read October 14, 2026)

One more meaning: a distributed ledger, such as a blockchain, is a shared record copied across many computers, usually with no central authority.6NIST, IR 8202, Blockchain Technology Overview, October 2018 (read October 14, 2026) It has nothing to do with your processor balance or your bank's ledger balance.