Last reviewed: July 2026.
The sales ledger, or customer subledger, records amounts owed by individual customers. In an integrated accounting system, sales documents update the customer account and relevant general-ledger accounts automatically. Reliable output depends on authorised master data, complete source evidence and controls over invoices, credit notes and receipts.
Main sales-ledger inputs
| Business event | Typical input/document | System effect |
|---|---|---|
| Customer approved | Customer master record, credit limit and tax details. | Creates authorised customer account. |
| Order received | Sales order. | Reserves or schedules goods/services; normally no revenue entry. |
| Goods dispatched / service delivered | Dispatch note, delivery confirmation or service evidence. | Supports fulfilment and invoice creation. |
| Invoice issued | Sales invoice. | Updates revenue, tax and trade receivables; customer account updated. |
| Goods returned / price reduced | Credit note and return authorisation. | Reduces revenue/tax/receivable as appropriate. |
| Cash received | Bank entry and remittance advice. | Debits cash and credits trade receivables. |
| Uncollectible balance | Write-off approval. | Recognises write-off under applicable policy and clears customer balance. |
Customer master data
Before processing credit sales, create and approve the customer record. Important fields include legal name, billing and delivery addresses, tax details, currency, payment terms, credit limit and contact information. Duplicate customers and unauthorised changes can cause misapplied receipts, fraud and reporting errors.
Changes to bank details are more relevant to suppliers, but customer refund details and credit-limit changes should also be independently verified.
Sales order
A sales order records what the customer requested, quantity, price and terms. It normally supports fulfilment but does not by itself prove that revenue should be recognised. The order should pass price, credit and availability checks before goods are released or services scheduled.
Dispatch or service evidence
A goods-dispatched note, signed delivery record, digital tracking event or service-completion evidence supports the occurrence and cut-off of the sale. The organisation should prevent invoices for unfulfilled orders and investigate delivered items that have not been invoiced.
Sales invoice
When the invoice is issued, an integrated system typically:
- debits trade receivables;
- credits revenue;
- records sales tax where applicable;
- updates the individual customer account;
- records product, department or project dimensions;
- creates due dates for ageing and collection.
ACCA’s computerised sales-and-purchases article illustrates how the sales invoice updates both the general ledger and the customer account.
Credit notes and returns
A credit note reduces or reverses an invoice for valid reasons such as returned goods, pricing errors or service adjustments. Controls should require a reference to the original invoice, evidence of return or approval, and separation between the employee requesting and approving the credit.
Cash receipts and remittance advice
Bank receipts should be matched to customer accounts using remittance advice, invoice references and amount/date information. Unidentified receipts belong in a controlled temporary account and should be investigated promptly rather than allocated to a convenient customer.
When cash is received, the entry is normally debit bank and credit trade receivables. Discounts and withholding taxes require separate authorised treatment.
Bad debts and allowances
A write-off removes a specific balance only after appropriate approval and evidence of uncollectibility. It is not the same as measuring an expected credit-loss allowance. The customer account, general ledger and collection records should remain consistent.
Input controls
- mandatory fields and valid customer codes;
- automated invoice numbering and duplicate checks;
- approved price lists and discount limits;
- credit-limit checks and override approval;
- three-way or two-way matching where appropriate;
- date and period controls;
- restricted credit-note and refund permissions;
- batch totals and interface monitoring;
- audit trails for edits and deletions.
ACCA’s computerised-accounting and audit guide describes the flow from order and dispatch evidence to invoicing and accounting records.
Worked example
A customer buys goods for 1,000 CU on credit. Sales tax is 100 CU. The invoice records:
- Debit trade receivables: 1,100 CU
- Credit revenue: 1,000 CU
- Credit sales-tax liability: 100 CU
The customer later returns goods priced at 200 CU plus 20 CU tax. An approved credit note reduces trade receivables by 220 CU. A bank receipt of 880 CU then settles the remaining balance.
Reconciliation and exception review
Review aged receivables, unapplied cash, duplicate invoices, negative balances, unusual credit notes, transactions after period close and customers above credit limit. Reconcile the customer listing to the receivables control balance while recognising that integrated reports may share the same database.
Common input errors
- wrong customer or invoice date;
- incorrect quantity, price, tax code or currency;
- invoice raised before delivery;
- duplicate invoice or duplicated interface batch;
- receipt allocated to the wrong invoice;
- credit note without evidence;
- manual journal posted directly to receivables.
Related guides
Read source documents, receivables and payables control accounts, accounting-software workflow and accounting-system modules.
Period-end cut-off and data protection
At period end, compare dispatch or service-completion evidence with invoices before and after the reporting date. This helps identify delivered items not invoiced, invoices raised too early and credit notes delayed into the next period. Review sequential invoice numbers and investigate gaps or duplicates.
Customer records contain personal and commercial information. Limit access, retain data only as required, protect exports and avoid placing sensitive card or bank information in free-text fields. Audit logs should show who changed customer details, credit limits, invoices and refunds.
Key takeaway
A reliable sales ledger begins before the invoice. Control customer setup, link orders to delivery evidence, restrict credit notes, match receipts accurately and investigate exceptions. Automation improves speed, but evidence and authorisation determine whether the records are trustworthy.