Accounting technology / Glossary / Purchase ledger

What is a purchase ledger?

Definition

The purchase ledger is the sub-ledger that records every supplier's account: the invoices received, credit notes, payments made and the balance still owed. Its total is the trade payables figure in the general ledger. The term is common in the UK and Commonwealth; in the US the same records are usually called the accounts payable ledger.

Also calledaccounts payable ledgercreditors ledgerbought ledgersupplier ledger

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Records: Supplier invoices, credits, payments
Total equals: Trade payables in the general ledger
US name: Accounts payable ledger

How the purchase ledger works

Each supplier has an account in the purchase ledger, holding its name, bank details, payment terms and every transaction. Posting a supplier invoice credits the supplier's account; a payment or credit note debits it. Before an invoice is posted it is checked against the order and delivery, coded to an expense account and approved. The ledger drives the payment run, which selects invoices that are due, and supplier statement reconciliation, which compares the supplier's view of the balance with the ledger to catch missing or duplicate invoices. In the general ledger only the total appears, in the trade payables control account. Accounts payable software now captures invoices, matches them and routes approvals before they reach the ledger.

Common questions

What is the difference between the purchase ledger and accounts payable?+

Accounts payable is the amount owed to suppliers, and the team that manages it. The purchase ledger is the record of each supplier's account that adds up to that amount.

What is supplier statement reconciliation?+

Comparing a supplier's statement with its account in the purchase ledger. Differences show invoices that are missing, duplicated, disputed or paid but not yet allocated.

Does the purchase ledger include expense claims?+

Usually not. Employee expenses are recorded through expenses or payroll, and card spend through the card account, though some businesses set up staff as suppliers to reimburse them.