What is Purchase Ledger?

The purchase ledger (also known as the bought ledger or creditors ledger) is the accounting book or system where you record all invoices received from suppliers and all payments made to them. It is the detailed subsidiary ledger that supports the accounts payable balance on your balance sheet.

• **What the purchase ledger records:**
• Supplier invoices: — date, amount, VAT, description
• Credit notes: received from suppliers
• Payments: made to suppliers (cheque, BACS, card)
• Running balance: owed to each supplier

• **Purchase ledger vs sales ledger:**
• Purchase ledger: = records your **purchases** (what you buy and owe)
• Sales ledger: = records your **sales** (what you sell and are owed)

Together they form the core of double-entry bookkeeping, with the purchase ledger feeding accounts payable and the sales ledger feeding accounts receivable.

The purchase ledger clerk's role: In larger businesses, a purchase ledger clerk is responsible for: - Entering supplier invoices into the system - Matching invoices to purchase orders and goods received notes - Coding invoices to the correct expense categories - Preparing payment runs - Reconciling supplier statements - Handling supplier queries

For small businesses and freelancers: Even if you don't employ a dedicated clerk, you still maintain a purchase ledger — it's wherever you record your business expenses. Cloud accounting software (Xero, QuickBooks, FreeAgent) automatically maintains your purchase ledger when you enter bills.

VAT and the purchase ledger: Your purchase ledger is where you track input VAT — the VAT on purchases that you can reclaim on your VAT return. Accurate purchase ledger records are essential for correct VAT returns and for surviving a VAT inspection.