Debugging 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.
  • 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.

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)

1. General Journal (not unposting) that changes the account balance without a corresponding invoice/bill debt
2. General Journal with no linked source transaction
3. Incorrect accounting group (i.e. posting a deposit to a creditor control account)
4. Posting to the control account (Setting the account of bill/invoice lines to the control account)
5. Postings that cannot be matched to source transactions
6. Transactions including deposits/cheques (not credit notes) with remaining unallocated funds
7. Posting to control account other than the control account of the current transaction (impacts balancing of the other account)
8. 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.