Wednesday, July 14, 2010

AP-GL Reconciliation

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Month End reconciliation between GL and AP is highly recommended. If AP is interfaced to GL, verifying the balance between the two applications is usually done through comparing account balances of the liability (A/P) account.

To reconcile your accounts payable activity for April, make the following calculation:
"Accounts Payable Trial Balance" as of March 31 +
"Posted Invoice Register" for the period between April 1 and April 30 -
"Posted Payment Register" for the period between April 1 and April 30 =
"Accounts Payable Trial Balance" as of April 30

> If total is not matching you will need to find out the root casue of difference:
Eg. Invalidated Invoice for the period
> For the PTD activity check the "period Close Exception" if there are any invoices and payments which are not transferred to GL.
> If the current period does not reconcile, please complete the reconciliation process for all prior periodsfrom the most recent to the earliest until you get to one that reconciles.

Common Reasons for balance mismatch between AP & GL
1) Manual journal entries in the general ledger that involve an AP liability account will cause the AP Trialbalance not to reconcile to the GL. These entries are not included in the AP subledger so they will not be reflected on the AP Trial Balance Report.
Run the "GL Account Analysis" report for the liability account and for the date range in question. Look for transactions with a source other than Payables. This can quickly pinpoint any transactions incorrectly charged to the account.

2) You performed a datafix in the past where you used the undo accounting script and swept a transaction forward from a closed period to reaccount it, this will cause an imbalance between AP and GL. The imbalancewill be corrected in the period in which you made a GL adjustment to account for the fix.

3) Any correction you make during the journal import process will result in the line being changed in the general ledger, but not in AP

4) If you have deleted any AP batches or lines from AP batches out of the GL Interface, this will cause AP and GL to be out of balance

5) If the AP batch is still in the GL Interface, it will not be reflected in the GL reports and this will cause a difference between AP and GL.

6) Any AP batches that are unposted in GL will cause a difference between AP and GL
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