> ## Documentation Index
> Fetch the complete documentation index at: https://docs.teal.dev/llms.txt
> Use this file to discover all available pages before exploring further.

# Managing ledgers

The first step to submitting your user's transactions is to map their real-world financial accounts, such as their
bank account, to a corresponding ledger in their chart of accounts. The process works a bit differently
depending on the end user's accounting package.

<Tabs>
  <Tab title="PlatformGL">
    <Steps>
      <Step title="Create a financial account ledger">
        Real-world financial accounts are represented by financial account ledgers. You create these ledgers like any ledger by using the [Create Ledger](/api-reference/ledgers/create-a-ledger) endpoint.

        Financial account ledgers must have a `financial_account_type`. By selecting the financial account type, we
        set smart defaults to ensure that the accounting treatment is accurate. For example, setting `financial_account_type` to
        `bank` automatically sets `type` to `asset`, `debit_credit` to `debit`, and `report_cash_flow` to `true`.

        <Tip>
          Each real-world financial acount should have its own individual ledger. You can see the complete list of supported financial
          account types [here](/api-reference/ledgers/create-a-ledger).
        </Tip>
      </Step>

      <Step title="Map the ledger">
        Once you have created a financial account ledger, you must store the association between the `ledger_id` of the
        financial account ledger and the real-world financial account it represents.

        We call this mapping, and you will use this mapping for various use cases such as submitting transactions.
      </Step>

      <Step title="Set the opening balance">
        It is important that the balance of the financial account ledger matches that of the real-world financial account on
        your user's [start date](/guides/instances/overview#start-date), or else their accounting will be inaccurate.

        If the real-world financial account was opened before your user's [start date](/guides/instances/overview#start-date),
        an opening balance must be set via the [Opening Balance](/api-reference/ledgers/set-a-ledger's-opening-balance) endpoint.
      </Step>
    </Steps>

    #### Best practices

    <AccordionGroup>
      <Accordion title="Map financial account ledgers at the beginning">
        If you already have access to financial accounts for the customer, for example, because you already
        serve them a banking or payroll product, then it's a good idea to create a ledger for each financial
        account as soon as you create the user's account in Teal.
      </Accordion>

      <Accordion title="Give descriptive names to ledgers">
        When creating a financial account ledger, it's important to give it a descriptive name so
        the end user can distinguish which account is which in case they ever open a 2nd account
        of the same type. We recommend using a naming convention that includes the last 4 digits
        of the account number, which is generally considered not to be sensitive information. For
        security and compliance reasons, we do not recommend including any more digits than the last four.

        For example, "Chase Checking \*\*5959" is a good name for a ledger, whereas "Bank Account 1" is not.
      </Accordion>

      <Accordion title="Make ledgers representing platform controlled financial accounts non-editable">
        If you control the financial account (e.g. via a neobanking/Baas offering), then you may
        want to make the ledger non-user-editable by setting the `editable` parameter to False
        when using the [Create Ledger endpoint](/api-reference/ledgers/create-a-ledger). This will
        prevent the user from editing any line entry that is assigned to the ledger. They will still
        be able to categorize the transactions and edit the rest of the journal entry. This feature
        ensures that the user does not accidently break the sync between the Teal ledger and the
        transactions submitted from the financial account.

        For example, if you submit a transaction for a \$10 expense for "Starbucks" using the
        [Create Transaction endpoint](/api-reference/transactions/create-transactions), Teal will automatically generate a
        journal entry with two line entries. One line entry will credit \$10 to the bank account ledger,
        the other line entry will debit \$10 to an expense ledger (depending on your
        [auto-categorization config](/guides/platform/categorization/pipeline)). If the bank account ledger
        is set to `editable` = False, then the user will be able to change the \$10 debit to the
        expense ledger, but not the \$10 credit to the bank account ledger.
      </Accordion>
    </AccordionGroup>
  </Tab>
</Tabs>