A general ledger review is one of the most practical ways to check whether your accounting records are telling the right financial story.

The general ledger contains the accounts used to record a business's financial transactions. When it is accurate and properly maintained, it provides the foundation for financial statements, tax reporting and management decisions.

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But errors can creep in.

A transaction may be posted to the wrong account. A bank reconciliation may be incomplete. An old balance may remain unresolved. GST may have been coded incorrectly. An expense may have been treated as an asset — or vice versa.

Individually, some errors may appear minor.

Collectively, they can distort your financial reports.

A regular general ledger review helps Australian businesses identify these issues before they become larger accounting, tax or decision-making problems.

Quick answer: What should you check during a general ledger review?

A practical general ledger review should look at whether:

• Bank and credit card accounts reconcile to external statements

• Balance sheet accounts contain genuine, supportable balances

• Revenue and expenses are recorded in the correct accounts

• GST and other tax-related accounts are properly supported

• Accounts receivable and payable agree with underlying records

• Loans and finance balances match current statements

• Fixed assets are correctly recorded and supported

• Payroll-related balances are reasonable and reconciled

• Suspense or clearing accounts have been investigated and cleared where appropriate

• Unusual or one-off transactions have appropriate explanations and documentation

• Prior-period adjustments have been properly recorded

• The resulting financial statements make sense compared with the business's actual operations

Australian businesses have record-keeping obligations covering transactions related to tax, superannuation and registrations. Good records also help businesses understand financial health, manage cash flow and make better decisions. business.gov.au

Why does a general ledger review matter?

Your financial reports are only as reliable as the records behind them.

If transactions are incorrectly classified or important accounts contain unexplained balances, your profit and loss statement and balance sheet may give management a misleading picture.

That can affect decisions about:

• Hiring

• Pricing

• Cash flow

• Investment

• Borrowing

• Tax

• Business growth

• Distributions

• Asset purchases

• Business performance

A general ledger review is therefore not simply an exercise in finding bookkeeping mistakes.

It is a way of asking:

"Do the numbers in our accounting system accurately represent what is happening in the business?"

That question becomes increasingly important as a business grows.

1. Start with bank and credit card reconciliations

Bank reconciliation is one of the fundamental checks in accounting.

A reconciliation compares the accounting records with the relevant bank statement to make sure the recorded balance agrees with the external source. Business.gov.au describes bank reconciliation as a cross-check between the cash book and the relevant bank statements. business.gov.au

During a general ledger review, check:

• Are all bank accounts reconciled?

• Are credit card accounts reconciled?

• Are there old unreconciled transactions?

• Are outstanding items legitimate?

• Are transactions duplicated?

• Are deposits and withdrawals recorded correctly?

• Are transfers between accounts properly matched?

• Does the ledger balance agree with the latest external statement?

Why this matters

Suppose the accounting system shows $185,000 in the business bank account.

The actual bank statement shows $163,000.

That difference needs an explanation.

It could be legitimate timing differences.

Or it could indicate:

• Missing transactions

• Duplicate transactions

• Incorrect entries

• Unpresented payments

• Incorrectly recorded transfers

• Reconciliation issues

Until the difference is understood, the reported cash position should not simply be accepted.

2. Review balance sheet accounts carefully

One of the most valuable parts of a general ledger review is checking the balance sheet, not just the profit and loss statement.

Business.gov.au describes the balance sheet as a snapshot of a business's assets and liabilities at a particular date. It can also help assess working capital and liquidity. business.gov.au

Look at each significant balance sheet account and ask:

What does this balance represent?

Is the balance still valid?

Can we support it with documentation?

Does it agree with another source?

For example:

• Bank accounts should agree with bank reconciliations.

• Loans should agree with lender statements.

• Accounts receivable should agree with debtor records.

• Accounts payable should agree with supplier balances.

• GST accounts should be supportable from the underlying records.

• Fixed assets should relate to assets the business actually owns.

• Employee-related balances should reconcile with payroll records.

A balance sheet can look perfectly reasonable at first glance while containing old or incorrect balances underneath.

3. Look for old or unusual balances

A general ledger review should pay particular attention to balances that have been sitting unchanged for a long time.

Examples include:

• Old receivables

• Old payables

• Suspense accounts

• Clearing accounts

• Employee advances

• Director or shareholder accounts

• Loans

• GST balances

• Payroll clearing accounts

• Deposits

• Prepayments

• Accrued expenses

An old balance is not automatically wrong.

But it should have an explanation.

For example, if a clearing account has contained $8,500 for eighteen months, the question should not simply be:

"Why hasn't anyone cleared it?"

The more important question is:

"What does this $8,500 actually represent?"

If nobody can explain it, further investigation is warranted.

4. Check revenue accounts

Revenue is one of the most important areas to review because errors can affect both profitability reporting and tax calculations.

Consider:

• Is revenue recorded in the correct period?

• Are sales duplicated?

• Are refunds and credits correctly recorded?

• Are different revenue streams separated appropriately?

• Are customer payments correctly allocated?

• Are unusual revenue entries supported?

• Do accounting records agree with invoicing or sales systems?

The review should also consider whether the revenue reported in the general ledger makes sense compared with operational information.

For example, if the business generated significantly more sales than usual in one month, ask why.

It might be genuine growth.

It could also be:

• A timing difference

• A large one-off invoice

• A duplicated transaction

• A change in revenue recognition

• A coding issue

The objective is not to assume the number is wrong.

It is to understand the number.

5. Review major expense categories

Expenses should also be reviewed for accuracy and consistency.

Look for:

• Unusual increases

• Duplicate transactions

• Incorrect account coding

• Personal expenses

• Capital purchases incorrectly treated as expenses

• Business expenses incorrectly treated as assets

• Recurring expenses that have stopped

• Large one-off transactions

• Expenses recorded in the wrong accounting period

A useful approach is to compare current expenses with:

• Previous months

• Previous financial years

• The current budget

• Forecasts

• Operational activity

If an expense category suddenly doubles, there should be a business explanation.

Perhaps the company hired additional staff.

Perhaps rent increased.

Perhaps a major project created additional costs.

Perhaps an invoice was posted incorrectly.

The general ledger review helps distinguish between those possibilities.

6. Check GST-related accounts

For Australian businesses registered for GST, GST records deserve particular attention.

The ATO states that businesses need records supporting the income and expenses used to calculate GST amounts and GST credits, including sales, tax invoices, fees, expenses, wages and other business costs. It also recommends keeping appropriate records for GST adjustments, decisions and calculations. Australian Taxation Office

During a general ledger review, consider:

• Is GST being coded consistently?

• Do GST-related balances make sense?

• Are transactions being treated with the appropriate GST treatment?

• Are tax invoices and supporting records available where required?

• Are GST adjustments documented?

• Do GST balances reconcile with BAS reporting?

The exact treatment depends on the transaction and the business's circumstances, so unusual GST entries should be investigated rather than automatically corrected.

7. Review accounts receivable

Accounts receivable represents money owed to the business.

A general ledger review should check whether the receivables balance makes sense compared with the underlying debtor records.

Look for:

• Old outstanding invoices

• Credit notes

• Duplicate invoices

• Unallocated customer payments

• Bad debts

• Unusual debtor balances

• Differences between the general ledger and debtor subledger

The review should also consider the age of outstanding amounts.

A business might report $250,000 in accounts receivable.

But if a significant portion relates to invoices that are substantially overdue, the headline number does not tell the whole story.

This is where accounting information connects with cash flow.

A sale recorded as revenue is not necessarily cash in the bank.

8. Review accounts payable

The same principle applies to accounts payable.

Check whether:

• Supplier balances are accurate

• Old invoices remain outstanding

• Payments have been allocated correctly

• Credit notes have been processed

• Duplicate bills exist

• The accounts payable balance agrees with supplier records

• Significant upcoming payments have been identified

This matters because accounts payable affects both the reported financial position and future cash requirements.

A business with strong reported profit can still face cash pressure if large supplier obligations are approaching.

9. Check loans and finance accounts

Loans should not simply be left in the accounting system after they are initially recorded.

During a general ledger review, compare loan balances against current lender statements.

Check:

• Principal balances

• Interest

• Repayments

• Fees

• Current versus non-current portions

• New borrowing

• Refinancing

• Loan repayments

• Asset finance

If the ledger and lender statement do not agree, identify why.

The difference could relate to timing, fees, interest or incorrect bookkeeping.

For a business with several loans or finance arrangements, this review can become particularly important.

10. Review fixed assets

Fixed asset accounts should represent assets that the business actually owns and that have been appropriately recorded.

Check:

• Asset purchases

• Asset disposals

• Depreciation

• Accumulated depreciation

• Capital improvements

• Finance arrangements

• Assets that have been sold or written off

• Assets still appearing in the ledger despite no longer being held

Business.gov.au recommends keeping records of assets bought or sold and expenditure related to improving assets, particularly when preparing for end-of-financial-year work. business.gov.au

An outdated asset register can cause the balance sheet to overstate the value of assets and may also affect depreciation calculations.

11. Review payroll-related balances

If the business employs staff, payroll-related accounts should also be reviewed.

Depending on the accounting setup, these may include:

• Wages

• Superannuation

• PAYG withholding

• Leave liabilities

• Payroll clearing

• Employee reimbursements

• Other employee-related balances

The objective is to check that accounting records align with payroll records and relevant obligations.

An unexplained payroll balance should not simply be carried forward from month to month.

12. Investigate suspense and clearing accounts

Suspense and clearing accounts can be useful during normal bookkeeping.

They can also become a problem when transactions remain there indefinitely.

A general ledger review should identify:

• Transactions sitting in suspense

• Old clearing balances

• Unallocated payments

• Unidentified deposits

• Unidentified expenses

• Temporary journals that were never resolved

A suspense account with a small balance might not look important.

But if it has accumulated hundreds of transactions, it may indicate a recurring process problem.

The goal is to understand why transactions are being posted there and why they are not being resolved.

13. Look for unusual journal entries

Manual journals deserve attention because they can materially change financial reports.

Review significant journals for:

• Large amounts

• Unusual descriptions

• Entries posted at period end

• Reversing journals

• Prior-period adjustments

• Entries affecting revenue

• Entries affecting profit

• Entries affecting director or shareholder accounts

• Entries without adequate supporting documentation

This does not mean manual journals are inherently problematic.

They are a normal part of accounting.

The question is whether significant adjustments are appropriate, explainable and properly supported.

14. Compare the general ledger with the business reality

This is where a general ledger review becomes more than a bookkeeping exercise.

Ask whether the numbers make sense operationally.

For example:

A construction business

If project activity increased significantly, do revenue, subcontractor costs and work-in-progress balances reflect that activity?

A professional services firm

If the team grew by 30%, do wages and related costs reflect the additional employees?

A retailer

If sales increased significantly, does the inventory position and cost of sales make sense?

A property business

Do rental income, property expenses, loan balances and asset records reflect the actual portfolio?

The accounting system should tell a story that broadly aligns with what management knows is happening.

When those two stories don't match, investigate.

15. Compare actual results with budget and prior periods

A general ledger review should not stop at asking whether individual transactions are correctly coded.

It should also consider the bigger picture.

Compare:

• Current month versus previous month

• Current period versus prior year

• Actual versus budget

• Actual versus forecast

• Revenue versus expectations

• Gross margin versus expectations

• Operating costs versus expectations

Business.gov.au recommends regularly comparing estimated and actual income and costs to identify shortfalls and make better financial decisions. business.gov.au

Significant variances should have an explanation.

That explanation might be operational, seasonal, strategic or accounting-related.

The important thing is to know which one it is.

What can a general ledger review reveal?

A properly performed review can uncover issues such as:

• Duplicate transactions

• Incorrect account coding

• Missing transactions

• Old unreconciled items

• Unsupported balances

• Incorrect GST treatment

• Misclassified assets

• Unusual expenses

• Unresolved suspense accounts

• Incorrect loan balances

• Aged receivables

• Payroll discrepancies

• Inconsistent journal entries

• Reporting that does not reflect operational reality

Not every issue requires a major correction.

Sometimes the review simply confirms that a balance is valid.

That is also valuable.

Good financial management is not about finding errors for the sake of finding errors.

It is about having confidence that the information being used to run the business is reliable.

How often should an Australian business perform a general ledger review?

The appropriate frequency depends on the size and complexity of the business.

A simple business may have a relatively straightforward ledger.

A growing business with multiple entities, employees, bank accounts, revenue streams, loans or locations may require more frequent and detailed reviews.

A practical approach could include:

Monthly

Review key balance sheet accounts, reconciliations, unusual transactions and major variances.

Quarterly

Perform a deeper review of account balances, tax-related accounts, receivables, payables, assets and financial trends.

Before important reporting

Review the ledger before financial statements, BAS, tax work, funding applications or major management decisions.

At financial year-end

Perform a comprehensive review before finalising annual accounts and tax-related work.

The appropriate process should reflect the business rather than following an arbitrary schedule.

General ledger review checklist

Before signing off a period, ask:

• Are all bank accounts reconciled?

• Are credit cards reconciled?

• Are major balance sheet accounts supported?

• Are old balances understood?

• Are suspense accounts cleared or explained?

• Are revenue transactions correctly recorded?

• Are major expenses correctly classified?

• Are GST accounts supported?

• Do accounts receivable agree with the underlying records?

• Do accounts payable agree with supplier information?

• Do loan balances agree with lender statements?

• Is the fixed asset register up to date?

• Do payroll-related balances reconcile?

• Have significant journals been reviewed?

• Are unusual transactions documented?

• Are prior-period adjustments understood?

• Do actual results make sense against budget and prior periods?

• Does the financial information reflect what is actually happening in the business?

If several answers are uncertain, the ledger may need more than a quick month-end check.

When should you bring in an accountant?

A general ledger review can become more complex when there are:

• Multiple business entities

• Related-party transactions

• Significant loans

• Complex GST transactions

• Large asset purchases

• Business acquisitions

• Disposals

• Rapid growth

• Significant changes in profitability

• Unusual balance sheet movements

• Prior accounting errors

• Funding or refinancing

• Preparation for an audit

Professional financial support can also be useful when management cannot clearly explain why the numbers have changed.

Business.gov.au notes that accountants can assist with financial statements, tax and financial or business advice, while bookkeepers generally focus on day-to-day financial transactions and related bookkeeping activities. business.gov.au

The key is knowing when the business needs more than transaction processing.

Why a general ledger review is more than a bookkeeping task

The general ledger sits underneath your financial reporting.

If it is inaccurate, everything built on top of it can be affected.

That includes:

Financial statements → tax reporting → management reporting → forecasts → business decisions

This is why a general ledger review should not be treated as an administrative box-ticking exercise.

It is part of maintaining financial clarity.

For Australian businesses, good record keeping also supports tax and other obligations and can help management understand financial health and make better decisions. business.gov.au

How Daintree can help

Daintree Consulting takes a broader view of accounting than simply processing transactions.

As a Brisbane-based firm supporting businesses Australia-wide, Daintree combines Accounting, Bookkeeping & Payroll, Taxation & BAS, Business Advisory, Outsourced CFO / Virtual CFO, Audit & Assurance and SMSF Accounting. SKILL Daintree

That integrated approach matters when a general ledger issue is connected to a bigger business problem.

A coding issue might reveal a reporting weakness.

A recurring reconciliation issue might point to a bookkeeping process that needs improvement.

An unexplained balance might indicate a broader cash-flow or financial-control issue.

And unusual financial results may require management reporting or CFO-level analysis rather than simply another journal entry.

Daintree's model is designed around financial clarity, senior-led relationships and practical advice, supported by CPA/CA-qualified leadership, 20+ years of experience and Big Four background. SKILL Daintree

The objective is simple: make sure your financial information is reliable enough to support confident decisions.

Final takeaway

A general ledger review is not just about finding bookkeeping mistakes.

It is about testing whether your accounting records accurately reflect the financial position and performance of your business.

At a minimum, review:

• Reconciliations

• Balance sheet accounts

• Revenue

• Expenses

• GST

• Receivables

• Payables

• Loans

• Fixed assets

• Payroll

• Suspense accounts

• Journals

• Unusual transactions

• Budget and performance variances

The bigger question is always:

Can you trust the numbers you're using to run the business?

If the answer is uncertain, a structured general ledger review can help identify where the uncertainty is coming from.

Need help reviewing your financial records?

Book a free 30-minute discovery call. We’ll look at where clarity is breaking down and identify a practical next step — with no pressure and no obligation.

Frequently Asked Questions

What is a general ledger review?

A general ledger review is a structured examination of the accounts and transactions recorded in a business's accounting system. It checks whether balances are accurate, supported, properly classified and consistent with the underlying financial activity.

What should I check during a general ledger review?

Key areas include bank reconciliations, balance sheet accounts, revenue, expenses, GST, accounts receivable, accounts payable, loans, fixed assets, payroll balances, suspense accounts and significant journal entries.

How often should a general ledger be reviewed?

Many businesses benefit from reviewing key accounts monthly, with a deeper review performed periodically and before significant financial reporting, tax work, funding applications or major business decisions.

What is the difference between a general ledger review and a bank reconciliation?

A bank reconciliation compares accounting records with a bank statement. A general ledger review is broader and can examine the entire accounting system, including bank accounts, revenue, expenses, assets, liabilities, GST, loans and other accounts.

Why do unexplained general ledger balances matter?

An unexplained balance may be legitimate, but it can also indicate an old transaction, coding error, missing entry, duplicate transaction or unresolved accounting adjustment. Investigating it helps improve the reliability of financial reports.

Can an accountant review my general ledger?

Yes. An accountant can review ledger balances and transactions, identify unusual or unsupported items and help determine whether corrections or further investigation are required. The appropriate scope depends on the business and the reason for the review.

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