Sales Ledger

The sales ledger is the accounting record that tracks all outstanding amounts owed to a business by its customers. It records every sales invoice raised, every payment received, and any credit notes issued. The total outstanding balance on the sales ledger represents the trade debtors figure on the balance sheet.

In invoice finance, the sales ledger is the primary asset against which the facility is secured. The finance provider takes a charge over the sales ledger and advances a percentage of the eligible balance, typically 70% to 90%. The quality, spread, and age profile of the sales ledger directly determine the advance rate and pricing available.

Managing the sales ledger effectively is one of the most impactful things a business can do for its cash flow. Regular review of the aged debtors report, prompt invoicing, clear payment terms, and consistent credit control all contribute to a healthy ledger that maximises available funding.

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