Debugging Debtors and Creditors Reports: Difference between revisions
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Follow these steps to validate and debug problems with debtors and creditors reports. | Follow these steps to validate and debug problems with debtors and creditors reports. | ||
'''Checks''' | |||
* Check that totals of bill/invoice header and line balances match each other. | * Check that totals of bill/invoice header and line balances match each other. | ||
** If they don't match, find specific transactions that do not match and review the data. The calculation of balance on either the header or the line may be incorrect. | ** If they don't match, find specific transactions that do not match and review the data. The calculation of balance on either the header or the line may be incorrect. | ||
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*** Creditors: The sum of balances on bill headers/lines including -ve balances for credit notes. | *** Creditors: The sum of balances on bill headers/lines including -ve balances for credit notes. | ||
*** Debtors: The sum of balances on invoice headers/lines including -ve balances for credit notes. | *** Debtors: The sum of balances on invoice headers/lines including -ve balances for credit notes. | ||
** Check the ledger total | |||
*** Ensure that the EOY process has been completed for the account | |||
*** Ensure it matches the sum of ledger transactions for the current year including the EOY starting balance. | |||
** Check the Diff and Error amounts | |||
*** The Error amount should be $0. If not: | |||
**** A one-off general journal may need to be applied to fix the account balance. | |||
**** The adjustments may be missing the reporting of a bad posting. This can be issolated by | |||
***** Running the reconciliation for sequential days until the Error amount changes. | |||
***** Review ledger transactions on that day to see which transaction was missed. | |||
***** Change the adjustments report to include the missed transaction situation. The Error should be zero unless there are further problems. | |||
General Checks | '''General Checks''' | ||
* Ensure that no invoice/bill line is over-paid. | * Ensure that no invoice/bill line is over-paid. Problems can include | ||
** Duplicated allocations | |||
** Migrated data from old systems. | |||
** All funds being allocated to one invoice/bill line which overpays it doesn't pay other lines. Overall this leaves the invoice/bill fully paid, but the lines are not correctly paid. This situation will be reported as overpaid and lines with remaining balances. | |||
* Ensure that the line status of invoices/bills matches the balance owing. | * Ensure that the line status of invoices/bills matches the balance owing. | ||
* Ensure that the header status of invoices/bills matches the associated line status values. | * Ensure that the header status of invoices/bills matches the associated line status values. | ||
* Ensure that unposted transactions don't have any net ledger transactions. | * Ensure that unposted transactions don't have any net ledger transactions. | ||
Common Posting Problems | '''Common Allocation Problems''' | ||
# | * Duplicated postings | ||
* Overallocations (shows up as -ve balances) | |||
* -ve deposit paying -ve invoice with -ve allocation (wrong way around) | |||
* Hidden balances due to flagging as fully paid | |||
'''Common Posting Problems''' (reported as adjustments) | |||
# General Journal (not unposting) that changes the account balance without a corresponding invoice/bill debt | |||
# General Journal with no linked source transaction | |||
# Incorrect accounting group (i.e. posting a deposit to a creditor control account) | |||
# Posting to the control account (Setting the account of bill/invoice lines to the control account) | |||
# Postings that cannot be matched to source transactions | |||
# Transactions including deposits/cheques (not credit notes) with remaining unallocated funds | |||
# Posting to control account other than the control account of the current transaction (impacts balancing of the other account) | |||
# Postings of +ve and -ve amounts for allocation journals to the same (control) account. These should post to different accounts or not be created. | |||
'''Move to a New Account''' | |||
Where data that was migrated from an old system is unable to provide sufficient information for CR/DR reconciliation, many errors and bad postings may be reported. As long as the total of invoice balances matches the DR Outstanding amount, the recommended approach is to move to a new ledger account. This involves: | |||
* Create one or more new Debtors control accounts for each entity. | |||
* Check the total invoice balances for and create a General Journal to transfer funds from the old account to the new account so that the amount in the new account exactly matches the total of the invoice balances. | |||
* Repoint settings so that new postings of invoices post to the new accounts. | |||
* Create an extra General Journal to zero out the account balance in the old accounts, with the other side of the posting going to a write-off or other appropriate account. This will represent the sum of unreconcilable data errors. | |||
* Deactivate the old accounts so that no further transactions are posted to these accounts. | |||
'''Monitoring''' | |||
It is recommended that the DR/CR reports are run on a daily basis. If the reported error is anything but $0, review the reported adjustments. Unpost and correct accounts etc and re-post any problem transactions. The reported error should return to $0. |
Latest revision as of 09:34, 23 June 2021
Follow these steps to validate and debug problems with debtors and creditors reports.
Checks
- Check that totals of bill/invoice header and line balances match each other.
- If they don't match, find specific transactions that do not match and review the data. The calculation of balance on either the header or the line may be incorrect.
- Run the reconcilation
- Check that the total "Outstanding" amount matches:
- Creditors: The sum of balances on bill headers/lines including -ve balances for credit notes.
- Debtors: The sum of balances on invoice headers/lines including -ve balances for credit notes.
- Check the ledger total
- Ensure that the EOY process has been completed for the account
- Ensure it matches the sum of ledger transactions for the current year including the EOY starting balance.
- Check the Diff and Error amounts
- The Error amount should be $0. If not:
- A one-off general journal may need to be applied to fix the account balance.
- The adjustments may be missing the reporting of a bad posting. This can be issolated by
- Running the reconciliation for sequential days until the Error amount changes.
- Review ledger transactions on that day to see which transaction was missed.
- Change the adjustments report to include the missed transaction situation. The Error should be zero unless there are further problems.
- The Error amount should be $0. If not:
- Check that the total "Outstanding" amount matches:
General Checks
- Ensure that no invoice/bill line is over-paid. Problems can include
- Duplicated allocations
- Migrated data from old systems.
- All funds being allocated to one invoice/bill line which overpays it doesn't pay other lines. Overall this leaves the invoice/bill fully paid, but the lines are not correctly paid. This situation will be reported as overpaid and lines with remaining balances.
- Ensure that the line status of invoices/bills matches the balance owing.
- Ensure that the header status of invoices/bills matches the associated line status values.
- Ensure that unposted transactions don't have any net ledger transactions.
Common Allocation Problems
- Duplicated postings
- Overallocations (shows up as -ve balances)
- -ve deposit paying -ve invoice with -ve allocation (wrong way around)
- Hidden balances due to flagging as fully paid
Common Posting Problems (reported as adjustments)
- General Journal (not unposting) that changes the account balance without a corresponding invoice/bill debt
- General Journal with no linked source transaction
- Incorrect accounting group (i.e. posting a deposit to a creditor control account)
- Posting to the control account (Setting the account of bill/invoice lines to the control account)
- Postings that cannot be matched to source transactions
- Transactions including deposits/cheques (not credit notes) with remaining unallocated funds
- Posting to control account other than the control account of the current transaction (impacts balancing of the other account)
- Postings of +ve and -ve amounts for allocation journals to the same (control) account. These should post to different accounts or not be created.
Move to a New Account Where data that was migrated from an old system is unable to provide sufficient information for CR/DR reconciliation, many errors and bad postings may be reported. As long as the total of invoice balances matches the DR Outstanding amount, the recommended approach is to move to a new ledger account. This involves:
- Create one or more new Debtors control accounts for each entity.
- Check the total invoice balances for and create a General Journal to transfer funds from the old account to the new account so that the amount in the new account exactly matches the total of the invoice balances.
- Repoint settings so that new postings of invoices post to the new accounts.
- Create an extra General Journal to zero out the account balance in the old accounts, with the other side of the posting going to a write-off or other appropriate account. This will represent the sum of unreconcilable data errors.
- Deactivate the old accounts so that no further transactions are posted to these accounts.
Monitoring It is recommended that the DR/CR reports are run on a daily basis. If the reported error is anything but $0, review the reported adjustments. Unpost and correct accounts etc and re-post any problem transactions. The reported error should return to $0.