Sage 200 - Reconciling Debtors/Creditors
Posted by Kathryn Smith, Last modified by Kathryn Smith on 10/11/21 14:57
Reconciling the Sales Ledger to the Nominal Ledger
To help you make sure that your financial statements are correct, we recommend that you reconcile the sales ledger with the nominal ledger regularly. This is done by making sure that the total balance on your aged debt reports is the same as the balance of your debtors control nominal accounts on the trial balance.
There may be occasions when the sales ledger balance does not match the balance in the nominal ledger.
To help you to investigate this you can:
This identifies any discrepancies between the balance of the debtors control nominal accounts for a selected period, and the sales ledger transactions posted to debtors control nominal accounts in that selected period.
Once you have closed an accounting period for the sales ledger, you can view the period end balances for the closed period in the Accounting System Manager module. The View Closed Period Balances window shows the balance for the sales ledger and the debtors control accounts in the nominal ledger for the same period. You can compare the balances to identify any discrepancies and the periods in which they occurred.
Even if no discrepancies are shown in the Debtors Reconciliation Enquiry or View Closed Balances window, the sales ledger and the nominal ledger may not match.
Before you begin
You must have:
What do you want to do?
Investigate any differences between the sales ledger and nominal ledger
How to investigate differences between the sales ledger and nominal ledger
Differences can arise between the sales ledger and nominal ledger for the following reasons:
Debtors control accounts not included in the debtors reconciliation enquiry
The Debtors Reconciliation Enquiry only shows the balance of the nominal accounts you have specified as debtors control accounts in the Reconciliation Enquiry Settings. The Sales Ledger includes all transactions.
If you have not included all the debtors control accounts, the sales ledger and nominal ledger figures will not match.
Transactions not yet posted to the nominal ledger
The debtors control account only contains current sales ledger transactions that have been posted to the nominal ledger. If you have sales ledger transactions in your waiting postings or deferred posting files, the sales ledger and nominal ledger figures will not match.
Transactions posted to the suspense account
Sales ledger transactions are posted to the debtors control account automatically. Several debtors control accounts may be used depending on:
If you have not created the required debtors control accounts, the sales ledger transactions will post to the suspense account. Therefore that sales ledger and nominal ledger will not match.
Transactions posted to different periods
Once you have closed a period, any transactions dated in the closed period, are posted to the next open period. This can create differences between the sales and nominal ledger as the transactions are reported in different periods.
For example, you enter an invoice on February 4th that is dated January 29th. The nominal ledger period for January is closed. The transaction is posted to the nominal ledger in February but will appear in the sales ledger balance for January.
Currency adjustment transactions are posted according to their allocation date and not the transaction dates. For example, if you enter a receipt dated in February, but the allocation to the invoice is dated in March, any currency adjustment transactions will be posted to March. This will create a difference between the sales and nominal ledgers.
Transactions that are posted to one ledger and not the other
Opening balances transactions do not update the Nominal Ledger. However, opening balances are included on the aged debt reports.
If you have entered an opening balance on your customer accounts, you will expect to have a matching opening balance journal in the nominal ledger to account for this.
The aged debt reports show all outstanding transactions regardless of period.
If your aged debt reports have not matched the debtors control accounts in the past, this balance difference is brought forward into later periods.
To investigate differences between the sales ledger and nominal ledger
Make sure you have selected all the debtors control nominal accounts in the Reconciliation Enquiry settings.
The Nominal Control Total shown on the View Closed Period Balances depend on the default nominal account settings for the Debtors Control account.
How the default nominal account settings affect the Nominal Control Total
This makes sure that any waiting postings are posted to the correct period.
This makes sure all transactions entered in the sales ledger are also posted to the nominal ledger.
Journal out any sales ledger transactions. Make sure they are dated in the same period as the original transactions posted to the suspense account. This makes sure that the Closed Period Balances are updated correctly.
If the ledgers matched in the past, start with period directly after the balanced period and work forwards.
If the ledgers have never matched, start with the most recent period and work backwards.
These transactions have a reference of Revalue in the nominal ledger.
There may be many transactions, with any of the listed situations, that can account for the difference between the sales ledger and nominal ledger.
Debtors reconciliation enquiry
About the debtors reconciliation enquiry
Use the Debtors Reconciliation Enquiry to reconcile your sales ledger accounts with the nominal ledger. The reconciliation enquiry shows any discrepancies between the debtor's control nominal account and the sales ledger.
It shows the following for the selected period:
These are the debtors control nominal accounts you specified on the Reconciliation Enquiry Settings in the Nominal Ledger.
If there is a discrepancy, this usually means that the aged debt report in the Sales Ledger will not reconcile with the debtors control nominal accounts in the Nominal Ledger. However, having no discrepancy does not mean that aged debt reports and the debtors control nominal accounts will match.
See How to investigate differences between the sales ledger and nominal ledger for more information on how to investigate any differences.
The enquiry only works with open item sales ledger accounts.
Before you begin
To run the debtors reconciliation enquiry
Open: Sales Enquiries > Debtors Reconciliation Enquiry.
The following information is displayed:
Produce credit control reports
About credit control reports
Use these reports to identify your outstanding customer debt.
Aged debtors reports
You can use the Aged Debtors reports to:
You can use the reports to identify which customers have not been paying you during the agreed payment terms and therefore which customers you need to target to reclaim outstanding monies.
This reports show you:
These are aged using the transaction date, the due date or the accounting period, depending on your Sales ledger settings.
Retrospective aged debtors report
The aged debtors reports show the outstanding balances for your customers, based on the data in the sales ledger on the day that the reports are run.
You can also produce the aged debtors reports for selected date in the past. To do this, select 'Restropective' on the report criteria. The aged debt report that is produced is for the Base data for ageing date entered. Invoices paid after this date are shown as not paid. Receipts allocated after this date are shown in the report as if they have not been allocated.
How transactions are shown on the aged debt reports
The following table shows when invoices entered and paid on different dates are shown on the aged debtors reports:
Due Date reports
Use the Due Date report to review outstanding balances on each account, aged using the due date held for each transaction.
To produce credit control reports
Open: Reports > Credit Control.
Transaction allocation dates
When allocation transactions, the allocation date should be the later of the 2 (e.g the date of the payment being allocated to the invoice).
If you post an invoice which is dated after the receipt or payment that pays it, and the invoice date does not fall within the period specified for the Aged Debtors report, it will cause discrepancies when you try to reconcile. This is because both the invoice and the payment do not appear on the Aged Debtors report, but the effect of the receipt or payment is included in the Trial Balance report, for example:
If you produce the Aged Debtors report and the Trial Balance report up to the 30th June 2007 (Period 6):
Alternatively both the Invoice and Receipt could be dated 28th June 2007 but if the allocation date is 2nd July (Period 7), this will also cause a discrepancy as the invoice will be classed as outstanding when the Aged report is ran to 30th June (Period 6).