docs: specification of payment ledger
diff --git a/erpnext/accounts/README.md b/erpnext/accounts/README.md
index da1f201..15f7039 100644
--- a/erpnext/accounts/README.md
+++ b/erpnext/accounts/README.md
@@ -10,4 +10,42 @@
- Sales Invoice (Itemised)
- Purchase Invoice (Itemised)
-All accounting entries are stored in the `General Ledger`
\ No newline at end of file
+All accounting entries are stored in the `General Ledger`
+
+## Payment Ledger
+Transactions on Receivable and Payable Account types will also be stored in `Payment Ledger`. This is so that payment reconciliation process only requires update on this ledger.
+
+### Key Fields
+| Field | Description |
+|----------------------|----------------------------------|
+| `account_type` | Receivable/Payable |
+| `account` | Accounting head |
+| `party` | Party Name |
+| `voucher_no` | Voucher No |
+| `against_voucher_no` | Linked voucher(secondary effect) |
+| `amount` | can be +ve/-ve |
+
+### Design
+`debit` and `credit` have been replaced with `account_type` and `amount`. `against_voucher_no` is populated for all entries. So, outstanding amount can be calculated by summing up amount only using `against_voucher_no`.
+
+Ex:
+1. Consider an invoice for ₹100 and a partial payment of ₹80 against that invoice. Payment Ledger will have following entries.
+
+| voucher_no | against_voucher_no | amount |
+|------------|--------------------|--------|
+| SINV-01 | SINV-01 | 100 |
+| PAY-01 | SINV-01 | -80 |
+
+
+2. Reconcile a Credit Note against an invoice using a Journal Entry
+
+An invoice for ₹100 partially reconciled against a credit of ₹70 using a Journal Entry. Payment Ledger will have the following entries.
+
+| voucher_no | against_voucher_no | amount |
+|------------|--------------------|--------|
+| SINV-01 | SINV-01 | 100 |
+| | | |
+| CR-NOTE-01 | CR-NOTE-01 | -70 |
+| | | |
+| JE-01 | CR-NOTE-01 | +70 |
+| JE-01 | SINV-01 | -70 |