how to calculate a ledger balance
you can calculate your ledger balance by taking the opening balance and subtract debits and add any credits deposits debits may include any transaction made throughout the day such as bank card transactions credits include deposits such as payroll as well as payments from customers or refunds after adding the credits and subtracting the debits from your opening balance you ll have your current ledger balance ledger balance vs available balancethe ledger balance differs from the customer s available balance which is the aggregate funds accessible for withdrawal at any one point because the ledger balance remains the same throughout the day it does not include real time transaction updates the available balance changes frequently throughout the day as transactions hit the bank account neither balance includes outstanding checks just written from the account but the available balance updates for recent automated teller machine atm withdrawals deposits and other transactions as the information is received by the bank understanding the difference between ledger balance and available balance is a vital aspect of proper financial planning after viewing the ledger balance if a check is written or a transaction is made an account holder may withdraw more money than is available this may lead to bank overdraft charges as well as fees from the other party s bank or business monitoring balances on a regular basis alerts a customer of any unauthorized transactions that occur or potential errors committed by the bank opening balance at the start of the daybalance without pending transactionsdoesn t change as frequentlyreal time balancechanges throughout the daymoney immediately availableimportance of ledger balancesthe ledger balance is the balance at the beginning of the day not the ending balance this balance is usually calculated at the end of the day which is the same as the available balance 