Balancing the AR Sub-ledger to the AR Control Account

Note: You cannot balance the AR Control Account unless the AR Sub-ledger is in balance.

1.  Confirm that all invoices up to and including the closing date have been properly posted to the general ledger with the Sales Posting programs (you may also perform the balancing procedure before posting sales as long as you adjust for the un posted sales on the worksheet you are using to balance the control account.

2.  Confirm that all payment activity for the date being balanced has been completed and that no subsequent payment activity is processed until after the sub-ledger has been balanced to the control account.   

3.  Use the General Ledger Trial Balance or Account Lookup program to obtain the current balance forward in the general ledger accounts receivable control account(s).  Print a copy of the AR balance to printer and note the last journal entry number included in the postings to the account in case it is needed later for reconciliation purposes.

4.  Compare the total accounts receivable general ledger balance(s) to the accounts receivable aging total.  This step may also require you to adjust for any un-posted sales for the period being balanced.  The two amounts should agree. 

AR Control Account Reconciliation Worksheet - This worksheet assumes that a valid AR Aging is produced each night and that all payment activity for the date being balanced is processed before the aging is produced (IE that it includes all payment activity).  This worksheet also assumes that the sub-ledger is balanced to the control account before the sales for the date being balanced are posted to the general ledger.

AR Aging Ending 7/2/07                      $ 975,000.00

Less Un-posted invoices 7/2/07           $ (50,000.00)

(From Invoice Register)           

AR Control Account Balance                         $ 925,000.00

Variance                                                   0

Last Journal Entry used                      150150         

(Establishes the cut off in the general ledger)

If the totals do agree, retain the reports and worksheets created in the prior steps to document this fact, and file them away for future use.  If the totals do not agree, the reasons can include.

      The general ledger accounts receivable balance(s) was not in agreement with the sub-ledger at the end of the prior periods processing.  This possibility can be confirmed or eliminated by checking the accounts receivable aging printed during the last closing date against the general ledger balances obtained and recorded at the same time.  If the balances do not agree then the imbalance was caused by prior activity and the prior period imbalance must be corrected before the activity during the current closing date activity can be reconciled.

      The activity for the current closing date was not processed and or posted properly.  This possibility can be investigated by checking the payment entry, invoice adjustment, and sales posting activities for the current closing date as detailed in the previous sections.

      Some or all of the current closing date transactions were not posted to the correct general ledger period.  Use the Account Lookup, Trial Balance or GL Postings report to make sure that all activity for the current closing date was posted to the correct general ledger period.  If activity was posted to prior periods, the GL accounts receivable account total(s) recorded when the period was closed will no longer agree with the current ending balance for the prior period.  If activity was incorrectly posted to a future period or periods, the Account Lookup program will show activity in the general ledger accounts receivable account in these periods.

      Invoices have been edited, voided or deleted using system maintenance and or disaster recovery programs.  This possibility can be confirmed or eliminated by having your System Administrator check the Operator History file.  A record is written to this file each time an invoice is edited or deleted using maintenance or disaster recovery programs.

      An index or other hardware related problem has occurred.  In some cases hardware or other system related problem can cause damage to the indexes used by some reports.  A damaged index can cause report output to be invalid.  If this is suspected, the operator should contact their System Administrator or Cove Systems personnel for assistance in repairing the appropriate data and/or index files.

    Data damage has occurred due to a hardware problem and the re-index was unable to correct the problem.  If the above steps have all been performed and the discrepancy has still not been resolved, it is likely that an invalid data condition has occurred and you should contact your system administrator for assistance.

      Processing Foreign Currency payments

      Displaying Customer Invoice history.

      Displaying Customer Payment history.

      Displaying customer check history and payment detail.

      Printing Invoices

      Creating Finance Charge Invoices for Past Due accounts.

      Automatically placing past due accounts on hold.

      Producing Customer statements.  .

      Updating the customer aging buckets which are displayed in the Customer Master file.


Accounts Receivable End of Period Procedures