Balancing of Receivables Against the General Ledger

One very important function that you should perform periodically is the balancing of receivables against general ledger accounts to catch and rectify any errors. To do this, use the Balance GL to Subledgers report. You can also balance these by using both of the following reports:

• Accounts Receivable Report (By G/L Account)

  On the A/R submenu, click Accounts Receivable Reports. Alternatively, click the Accounts Receivable Reports () icon on the GlobalWare icon toolbar. On the Accounts Receivable Reports dialog box, select By G/L Account in the Report Type field. Run the report. For more information about this dialog box, see Accounts Receivable Reports.

• GL Query Report (for open items on accounts 1510 [Accounts Receivable – Customers] and 2040 [Unapplied Funds – Customers])

  On the GL submenu, click GL Edit & Query. Alternatively, click the GL Edit & Query () icon on the GlobalWare icon toolbar. On the GL Edit & Query screen, specify the cutoff date from the Accounts Receivable Report (by G/L Account) in the To field for the posting date range. Run the report for open items on accounts 1510 (Accounts Receivable – Customers) and 2040 (Unapplied Funds – Customers) with sort 1 on REF 2 and sort 2 on Post Date.

By running these reports, you can quickly compare the amounts in the OnAcct, ARC/Dir, and Invoice columns of the Accounts Receivable Report (by G/L Account) with the open items on the GL Query report that you ran. For cash-basis accounting, compare the ARC/Dir column to the general ledger. For accrual accounting, compare the total of the ARC/Dir and Invoice columns to the general ledger. If everything is correct, the amounts match exactly. If not, the accounts are out of balance and you should fix them.

Examples:

• The current date is July 25. Backdate the report so that the cut-off date is July 10.
• An open item for $1000 exists on July 9; it is included on the report.
• A payment of $400 was entered and applied to the open item on July 16. The payment is not included on the report; however, the effect of the payment (the amount it reduced the open item) is reflected on the report; the total is $600. In general ledger, however, the total as of July 9 is $1000.