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What is Ledger Balance? Ledger vs Available Balance

September 15, 2023

What is Ledger Balance? Ledger vs Available Balance

Ariel Gottfeld

Ariel Gottfeld

Understanding the difference between ledger and available balance can help improve your financial management skills. Both play important roles in managing your money, but each term refers to different things.

Let’s take a closer look at what ledger balance is, what available balance is and how to monitor them. what is ledger balance

What is Ledger Balance?

So, what is ledger balance, exactly? The ledger balance refers to the opening balance in a checking account each morning. It’s sometimes called the current balance.

Banks update ledger balances at the end of the day after all transactions have been processed and approved, including cleared checks, deposits, withdrawals, interest income, bill payments and other activities. It’s an automatic process that doesn’t require any action on your part.

Once the ledger balance has been calculated by the bank, your checking account will show the new balance at the start of the next business day.

How is Ledger Balance Calculated?

Ledger balance is calculated by your bank at the end of each business day. It includes all transactions that are calculated that day, including:

  • Cleared checks
  • Deposits
  • Interest income
  • Debit transactions
  • Cleared credit cards
  • Wire transfers
  • Debit transactions

Let’s say that you have a ledger balance of $200. You have a total of $25 in credits for the day, which you deposited at your local bank. You also debited $15 from the ATM. Your new ledger balance would be $210 the next business day.

It’s important to note that the bank handles these calculations for you, and it is an automated process.

But if you don’t want to wait for the bank to do its calculations, you can determine your own ledger balance by:

  • Adding all credits to your opening balance.
  • Subtracting all debits.

Now that you have a better understanding of how ledger balance is calculated, let’s take a look at the difference between ledger balance vs available balance. financial management

Ledger vs Available Balance

While they are similar in nature, ledger and available balance are two separate things. So, what’s the difference between ledger balance and available balance?

  • Available balance is the amount of money available for withdrawal at any given time.
  • Ledger balance is the opening balance at the start of the business day.

An account’s available balance may fluctuate throughout the day, depending on your activities. Ledger balance, on the other hand, is only updated at the end of the day.

Available balance also takes into account all debits and credits from transactions that haven’t been posted to bank accounts, whereas ledger balance does not.

Factors that Affect Ledger and Available Balance

Available balance is the money that you have at any given time during the day. Ledger and available balance have many factors that may affect them, including:

  • Pending deposits or withdrawals
  • Processing delays
  • Transfers between banks

If you look at your ledger balance in the morning and it’s $10,000 and you deposit a check for $1,000, the check will not appear on the daily statement. Instead, the ledger will be updated on the following business day and that’s when the statement will reflect the deposit.

You will notice that throughout the day, your available balance will change due to the money that goes in and out of the account.

However, pending transactions may not be reflected in the available balance, meaning that you may have more or less money in the account than you assume.

If you make a large purchase and do not have enough funds in the account, it can lead to being overdrawn and substantial fees.

How to Monitor Ledger and Available Balance

You can monitor your own internal ledger to have a general idea of your ledger balance, but most companies rely on their bank’s platform to show them the available balance. Bank available balance information is often more accurate because:

  • Delays can occur, meaning even though the transaction is pending, you cannot use the balance
  • Errors can occur in your own internal ledger

You can use internal software that connects to your bank’s platform to help you monitor your ledger and available balance. However, if an error occurs, you’ll need to work with your banking institute to help rectify the issue.


Financial management requires continued monitoring of your ledger and available balance. Your ledger balance is what’s available at the end of the day and will be the amount of money in the account the next business day.

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