Reconciling Accounts Payables to the General Ledger

Before performing the Month End routine to close an accounting period, be sure to reconcile the Accounts Payable Aging Schedule to the general ledger Trial Balance.  The total amount of the aging schedule should match the balance of the accounts payable account(s) on the trial balance as of the same period end date.  For your convenience, the Ledger module contains a worksheet to assist you in reconciling the general ledger to the aging schedule.

Depending on the setup of your system, there could be four different accounts in the general ledger that make up the total of the accounts payable.  The Payables > Properties option allows one general ledger account to hold the unpaid balance of all 'regular' invoices (non subcontractor payment sheets and non purchase order related invoices), one account to hold the current amount due of all subcontractor payment sheets, and one account for the retention withheld on the subcontractor payment sheets.  The Orders > Properties option allows an account to hold the unpaid balances of invoices entered on purchase orders.  (Different account numbers do not have to be used for these fields).  The sum of these accounts should equal the total of the aging schedule.  Be sure to use the same period end date on both reports and be sure to print the aging schedule as 'reconstructed'.

If the totals of both reports are not equal, then try printing a General Ledger Report in the Ledger system for the same accounting period to see if any general journal entries (source code 50) were coded to the accounts payable account(s).  The only entries that should ever post to the payables accounts are accounts payable invoices (SC 40 or 43), subcontractor payment sheets (SC 41), cash disbursements (SC 45) and joint check cash receipts (SC 36).  The only exception to this rule would be when a new AccuBuild customer is establishing beginning balances in the general ledger.

Another entry that will prevent the Aging Schedule from tying to the Trial Balance is an invoice that is entered with the expense account the same as the accounts payable accrual account (or visa versa).  This type of entry would post both a debit (positive amount) and a credit (negative amount) to the same account leaving a net balance of zero in the account for the invoice.  However, the Aging Schedule would reflect the amount of the actual invoice, thus making the two systems out of balance.  Print the Payables > Reports > Purchase Journal to review the accounts that the invoices have been coded to.  If the invoice has not been paid, then the invoice can be voided and re-entered properly, or a general journal can be entered to reclassify the invoice to the proper accounts.  

Likewise, the same theory can be applied to check entries.  Print a Cash Disbursements Detail report from the Payables > Reports menu; the debit and credit account numbers on any check should not be the same.  The cash disbursement entry can  be corrected by voiding and re-entering the check or a general journal can be entered to reclassify the receipt to the proper accounts.  

Note:  Although voiding and re-entering the invoice or check entries require more postings than a simple general journal entry, more information can be tracked with a cash receipt or an invoice than can be tracked with a general journal entry.  

You may also print the A/P Aging Error Report from the Reports > Payables menu.   This report checks for problems with the unpaid invoice balance.  This report reconstructs each payable invoice balance by rebuilding the payable amounts and subtracting the unpaid amounts on each invoice and comparing the computed balance to the current open balance on the invoice (if any).  This can help to pinpoint issues when they arise which can happen with batch log editing.