How to Set up a Small Business Accounting Expense Ledger

General business ledgers include five sections: liabilities, assets, revenue, expenses and owner's equity. Each one of these sections requires a separate accounting ledger. Each ledger book will contain several accounts, so an expense ledger may include items such as office supplies, telephone expenses and rent.

What You'll Need:

• Chart of accounts (COA)


• 12 months of bank statements

1. Review your bank statements and create a listing of regular monthly expenses, quarterly expenses and annual expenses. You'll also need an expenses listing for office supplies, marketing, entertainment and travel. Use this list for setting up your chart of accounts.


2. When establishing your chart of accounts, use the following number guide to properly label your accounts: 1000-1999 for assets, 2000-2999 for liabilities, 3000-3999 for owner's equity, 4000-4999 for revenue, 5000-5999 for cost of goods sold, 6000-6999 for marketing and intangible expenses, 7000-7999 for other revenues, 8000-8999 for administrative, travel and other miscellaneous business expenses.


3. Marketing intangibles on an expense ledger may also include 6000-6999 for general expenses, 6100 for advertising, 6200 for financial fees, 6300 for charitable donations, 6400 for depreciation, 6500 for employee benefits, 6600 for taxes and 6700 for insurance. Each of these categories can be divided even more into several other numbered subcategories including officers' insurance, error and omission insurance, vehicle insurance and any other type of insurance you carry.


4. Your administrative, personnel, travel and miscellaneous business expense ledger may also include subcategories such as 8100 for rent, 8200 for electric utilities, 8300 for Internet, 8400 for telephone, 8500 for legal and accounting fees, 8600 for salaries and wages, 8650 for payroll taxes, 8700 for office supplies, 8800 for repair and maintenance.