Its month end and when you come to reconcile the General Ledger control accounts to Receivables or Payables there’s a difference! You check all the usual things like unposted General Ledger batches or manual journals that may have been inadvertently posted to a control account, but this proves fruitless. So where do you start to track down the difference? There’s quite a lot of information out there on this however one technique I’ve found that gives me the most success is to narrow down the difference to a single day using the Historical Aged Trial Balance and the General Ledger Trial Balance and then use smartlists to focus on the transactions on that day. So without further ado here’s the full process.
Step 1: Find the date the ledgers last balanced.
This is very important. For this to work you need a point in time when the Receivables (or Payables) Historical Aged Trial Balance matches the control account. In reality the ledgers should be reconciled at least monthly so this shouldn’t be a problem
Step 2: Run the Historical Aged Trial Balance periodically and compare this to the General Ledger Trial Balance of the control account.
Now you have a starting point when the ledgers balance run the historical aged trial balance report periodically using the “Print/Age as of” field and compare this to the General Ledger trial balance for the same date range until you find the difference.
For example, let’s say the General Ledger and Receivables last balanced at the end of February but don’t balance at the end of March 2019. In this scenario you’d run the historical aged trial balance with a “Print/Age as of” date of the 7th of February as per below:
You’d then run the General Ledger Trial Balance for the control account up to the 7th of February as per below:
If the Historical Aged Trial Balance matches the General Ledger Trial Balance you can safely assume the difference occurred later in the month and therefore you repeat the process running the same reports but advance the date. For example, you’d run the Historical Aged Trial Balance report with a “Print/Age as of” of the 14th of February and the General Ledger Trial Balance report with a date of 14th of February. Once you find a point where the reports no longer match you alter the date working backwards until ultimately you have one day when the reports match and the following day when the reports don’t match. You have now found the date the ledger goes out of balance!
Step 3: Run a smartlist of the General Ledger and Receivables transactions for the day the ledgers went out of balance
Now you have the exact date the ledgers went out of balance you can run a smartlist of the General Ledger and Receivables transactions and compare them looking for differences.
To do this use the “Account Transactions” smartlist for the General Ledger using the date the ledgers go out of balance.
Therefore, assuming the date we have identified when the ledgers went out of balance is the 10th of February, you’d run the smartlist using the following search criteria:
Next run the “Receivables Transactions” smartlist for the Sales Ledger using the same date as per below:
If you output both smartlists to Excel you can compare the two datasets and hopefully this will highlight the transaction(s) causing the difference. However if you still can’t find the difference Step 4 may help.
Step 4: Check the Apply records
Normally by Step 3 I’ve identified the difference and can take corrective action. However, on the rare occasion this doesn’t help I’ve had to examine the apply tables in SQL as I’ve found a journal hasn’t posted for a multi-currency exchange gain or loss.
To explain in more detail when one or more foreign currency transactions are applied with difference exchange rates a journal is created in the General Ledger to adjust the control account. This is also recorded on the RZGANLOS field in the Receivables apply tables namely RM20201\RM30201.
To see if this is causing an issue you need to have access to SQL to run a query. The query I use is below assuming the date the ledgers went out of balance is the 10th of February:
set dateformat dmy
select * from RM20201 where DATE1 = ’10 Feb 2019′ AND RLGANLOS<>0
select * from RM30201 where DATE1 = ’10 Feb 2019′ AND RLGANLOS<>0
In my experience you should have at least one journal for each record produced by the query. In the General Ledger smartlist they would have a source document of “RMAPY”. (apply journal). If not a manual journal may have to be posted for any missing journals.
After following these steps I can usually find the difference.
Thanks for reading.