Reconciliation of accounts receivable and accounts payable

We recommend that at every month end or at least once a quarter, you check your Accounts Payable and Receivable balances and verify that they are correct. If they are not – you could be under or overstating profits or losses, and you may not be accounting for VAT correctly.

If you are one of our clients – we will certainly ask you to do help us do this as part of our year-end review procedure.

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Accounts Receivable (AR)

Accounts Receivable (AR) – shows you the amount of money that your customers owe you. Keep this up to date on a daily basis and you will be able to chase over due accounts promptly and manage the cash coming in.

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Accounts Payable (AP)

Accounts Payable (AP) – will show you the balance owing to each supplier at the month end. Useful for cashflow management and planning – working out who you will need to pay and when.

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To drill into the accounts:

One of the most useful views is to look at your AP or AR reports by invoice. You can expand your view by clicking on the option to ‘Show Invoices’. Don’t forget to Update.

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If we wanted to look at Bayside in more detail, we can right-click on the hyperlink to the invoice and open it in a second tab.

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It’s quite useful to have several tabs open at the same time when you are looking at reports or investigating queries. In this instance I have Aged Payables open in one tab, the Supplier account open in another and I have the Bill in a third.

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Work through each Customer or Supplier investigating differences and allocating payments on account where possible. This will keep your Aged Payables and Receivables accounts in order.

Making Adjustments:

1. Allocating payments on account or credit notes 

Locate the payment on account that is to be allocated. Either open up in the same tab, or right click on it to open it in the second tab. (Useful if you are making multiple changes to an account) .

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Click on the option to allocate the credit and allocate to the appropriate invoice. If the Payment on Account is a very specific figure but does not clearly match, it may be worth checking for a missing invoice.

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2. Deleting duplicate invoices

It may be worth checking the references and the values on your bills, you may realise that Oops, you’ve duplicated an invoice.

You can right click on the invoice options to void them.

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