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faq:accounts_receivable_reconciliation

AR Reconciliation

Where to Start

Checklist

  • Make sure you are in proof using the Test Proof routine
  • Correct all integrity errors. Remember, in the end the fix will almost always be to deal with one of these error messages.
  • Take a look at the GL Account activity for things like journal entries posted to AR, or other transactions that should not be posting to the controlled account (ie: Bills posting to the A/R ledger)
  • Find out when the A/R or A/P ledger starts to go out. Sometimes you will find that the initial journal entry was not correct and it was never correct.
  • Use the Accounts Recievable Sub-Ledger report to identify suppliers that are out. Caution: the old way starting balances were done didn't post to the AR clearing account so this AR account for starting balances may have to be created, and a toolbox routine need to be ran.
  • Run a Fix Balance Errors routine on the AR account to make sure it is in check
  • Go back to the first item in this list and start again, sometimes going back and doing the same thing will help you catch something you missed.

My previous year is closed and I don't want to touch it

There are some situations where the previous years are not going to get touched. In this case we must assume that the Aged AR was reconciled at that point. Since we are not going back into the previous year to reconcile it, we need to make an adjustment to bring the previous year end balance in the Accounts Receivable general ledger account inline with the Accounts Receivable listing.

  • Run the aged AR report for last year end
  • Run the Trial Balance or Balance Sheet for last year end
  • The difference needs to be removed. Adjust the balance of the AR GL to match the AR listing
  • In order to do the entry above we put the other side of the GL entry to 2999 for your accountant to distribute

This work has put us in a position to focus on the current year. The one thing this method doesn't ensure for is continuity from last years Aged AR balance. In order to ensure continuity between the two years we need to check to make sure the Aged AR report for the last year end still matches the printout from last year. If not then the best fix would be to reconcile the individual balances and find any offending entries and make sure they are recorded correctly. If for example we had an entry for December 31st that did not show in your last year end the entry must be dated in the next year.





Author: cmackay
Editor: arose
Last Edited: 6-Sept-2007

faq/accounts_receivable_reconciliation.txt · Last modified: 2008/02/06 16:26 by cliff