Troubleshooting balancing Accounts Payable with the appropriate account in General Ledger in Microsoft Dynamics SL

This article describes how to reconcile the balances in the Accounts Payable (AP) module with the appropriate account in the General Ledger (G/L) module on a monthly basis, and the reports that you can use during the process.

Applies to:   Microsoft Dynamics SL
Original KB number:   888149

Summary

First, you must print the Vendor Period Trial Balance report or the Period Sensitive Aged AP report in the Accounts Payable module. You must print the Trial Balance report in the General Ledger module, and then compare the two reports. If you find any inconsistencies, you must print the Detail General Ledger report. If the inconsistency is caused by a transaction that was made through another module, you must locate the original entry for the transaction. If the inconsistency can't be found in the current period, you must analyze the prior periods and the unposted entries. As final steps in trying to identify the cause of the inconsistency, you may have to do transaction validation or an integrity check.

Introduction

In Microsoft Dynamics SL, you should reconcile the balances in the Accounts Payable module with the appropriate account in the General Ledger module. We recommend that you reconcile the balances as part of each month-end closing process. Doing a monthly reconciliation offers the following benefits:

• The correct documentation is available when an audit is scheduled.
• Inconsistencies in the information in the two modules can be identified and corrected before the period is closed for the month.

Print reports in the AP module and in the G/L module

All the information that is entered in the Accounts Payable module updates a General Ledger account. The primary account that you must reconcile in the Accounts Payable module is the accounts payable account. Other accounts that you must reconcile include the holding account, the purchases accounts, the pre-payment account, and the cash accounts.

Step 1: Print a report in the Accounts Payable module

To verify that the Accounts Payable amount and the General Ledger amounts are the same for the current period or for past periods, you can use one of the following two reports in the Accounts Payable module:

• The Vendor Period Trial Balance report

  If you print the Vendor Period Trial Balance report, use the Prior Period format. If you have a multiple-currency database, use the Prior Period - MC format.

• The Period Sensitive Aged AP report

  If you print the Period Sensitive Aged AP report, use the Historical format. If you have a multiple-currency database, use the Historical MC format. We recommend that you don't use the Aged AP report or the Vendor Trial Balance report because these two reports include Accounts Payable batches that are released to a future period.

  It's also helpful to compare the balance that appears in the Period Sensitive Aged AP report to the balance that appears in the Vendor Period Trial Balance report. In this way, you can rule out any discrepancies between the two reports. If the two reports aren't in agreement, you can narrow down which vendor is causing the two reports not to agree. Additionally, if the two reports show two different balances, check to see if either report agrees to the GL.

Step 2: Print a report in the G/L module

In the General Ledger module, you must print the Trial Balance report for the account that you're balancing. You can use either the Combined Totals format or the Debit and Credit Totals format.

To specify the account in the General Ledger module that you want to print a Trail Balance report for, follow these steps:

1. In the Trial Balance (01.610.00) dialog box, choose the Select tab.
2. In the Field field, type account.acct.
3. Select Equal in the Operator list, and then type the account number of the accounts payable account in the Value field.

Step 3: Compare the reports

The account total in the Trial Balance report should balance with the total in the report that you printed in the Accounts Payable module. If the totals from these two reports balance, no additional action is required.

Reconcile differences between the report for the AP module and the General Ledger Trial Balance report

If you find an inconsistency between the totals in the Period Sensitive Aged AP report, or in the Vendor Period Trial Balance report, and the General Ledger Trial Balance report, follow these steps to locate the source of the inconsistency.

Step 1: Print the Detail General Ledger report

First, print the Detail General Ledger report. The Detail General Ledger report shows all the entries that have been posted to the accounts payable accounts and to the subaccounts for the period. The JrnlType field lists the module that the entry originated in. If the journal type is AP, the entry originated in the Accounts Payable module. If the journal type is GJ, the entry originated in the General Ledger module. If the journal type is AR, the entry originated in Accounts Receivable. If there's a journal type that is different from AP, an entry was made to the accounts payable account by using another module. Entries that are made to the AP account through other modules create a difference between the totals in the General Ledger module and the Accounts Payable module. If there's a journal type that is different from AP, you must locate the original entry.

Step 2: Locate the original entry

To locate the original entry, follow these steps:

1. The batch number of the transaction in the BatNbr field, and the entry in the JrnlType field is in the Detail General Ledger report.

2. Open the edit report dialog box for the module that is listed in the JrnlType field.

   For example, if the journal type that is listed in the JrnlType field is GJ, open the General Ledger Edit (01.810.00) dialog box.

3. In the edit report dialog box, choose the Select tab.

4. Type batch_batnbr in the Field field.

5. Select Equal in the Operator list, and then type your batch number in the Value field.

6. Research the transaction in question on the batch report. Decide the adjustments that are required to balance the General Ledger accounts and the Accounts Payable accounts.

If you can't resolve the inconsistencies by using the current period reports, you must analyze the prior periods and the unposted entries.

Step 3: Analyze prior periods and unposted entries

Entries that are posted to prior periods don't print on the current-period Detail General Ledger report. If the current-period total in the Accounts Payable module doesn't agree with the current-period total in the General Ledger module, examine previous periods to determine when the out-of-balance condition started. Print a Detail General Ledger report for the prior period, and then research the transactions that were posted to that period. Transactions that were posted in a different period are marked with an asterisk. The following message is printed at the bottom of the page:

Indicates that the period entered is different from the period post

You can also use the General Ledger Transaction report to try to reconcile the inconsistencies between the General Ledger module and the Accounts Payable module. To print this report, select General Ledger Transaction on the Reports menu. Use the Unposted format. All transactions that are entered through subsidiary modules such as the Accounts Payable module or through the General Ledger module are listed in this report. You can review this report to make sure that there are no unposted transactions that affect the balances in the General Ledger module.

If you can't resolve the inconsistencies by analyzing the unposted entries and the prior periods, you must do the data verification procedures that are described in the following sections.

Step 4: Do transaction validation

Review the Account Distribution report to verify the following points:

• Make sure that the accounts payable accounts were correctly credited for vouchers and adjustment credits.
• Make sure that the accounts payable accounts were correctly debited for adjustment debits and checks.

The balance in this report should match the balance of the Accounts Payable accounts in the Detail General Ledger report. You may be able to identify transactions by reviewing the Transaction Type field. The following transaction types are in the Accounts Payable module:

• VO = Voucher
• CK = System Check
• HC = Manual Check
• AC = Adjustment Credit
• AD = Adjustment Debit

The batch number of each transaction is also listed in this report. If you find a questionable transaction, the batch number are in the Batch field, and then review the batch by running the Accounts Payable Edit report by batch number.

The Accounts Payable Transactions report that you can print from the Accounts Payable Reports dialog box is a helpful report if questionable transactions appear on one or more of these reports. This report lists each transaction that was entered for the current period in the Voucher and Adjustment Entry (03.010.00) dialog box, the Manual Check Entry (03.030.00) dialog box, and the Checks (03.620.00) dialog box. The report shows the accounts payable account and the offsetting expense account that each transaction was posted to.

It's also helpful to print the GL Transactions report and compare it to the AP Transactions report. Each entry in the AP Transactions report should appear in the GL Transactions report. Conversely, all transactions on the GL Transactions report that affect the AP accrual account should appear on the AP Transactions report. Investigate any discrepancies.

To print the report for a specific transaction type, follow these steps:

1. Choose the Select tab.
2. Type aptran.trantype in the Field field.
3. Select Equal in the Operator list, and then type the transaction type in the Value field.

If you can't resolve the inconsistency by reviewing of these reports, you must do an integrity check.

Step 5: Do an integrity check

The integrity check verifies that the data in the Accounts Payable module is complete and correct. You do an integrity check from the Accounts Payable Integrity Check (03.990.00) dialog box. You can open this dialog box in the Accounts Payable Screens dialog box.

You can use three options to verify the data in the Accounts Payable module. You can't change data when you select the following verification options:

• Verify Document Balances
• Verify Posted/Unposted AP Batches
• Verify Vendor Balances

We recommend that you always use the verification options before you use the other four options that correct or rebuild the data.

You must use caution when you use the correct options and the rebuild options in the Accounts Payable Integrity Check (03.990.00) dialog box. These options change the data in the related records. Don't run the rebuild processes without approval from an accounting supervisor or from your Microsoft Dynamics SL consultant. Always back up the database before you use the following options:

• Correct Document Balances
• Rebuild Vendor Balances from Documents
• Rebuild Vendor History from Documents
• Rebuild 1099 History

Before you use the Rebuild Vendor Balances from Documents option, we recommend that you make sure that all the documents in the database are complete and correct. This option computes every vendor balance based on the open Accounts Payable documents. The Rebuild Vendor History from Documents option updates the vendor history records by summarizing the Accounts Payable documents for each vendor by period.

If you find and correct errors, you must reprint and review the General Ledger Trial Balance report. Also, reprint the Vendor Period Trial Balance report or the Period Sensitive Aged AP report in the Accounts Payable module. Verify that the balances are agreed.

The Rebuild 1099 History option isn't discussed in this document because it doesn't affect reconciliation of the Accounts Payable module and the General Ledger module.

After you finish monthly reconciliation, and you verify that the Accounts Payable module and the General Ledger module are balanced, you can do the month-end closing.

More information

Discrepancies between the balances of the AP period reports and the General Ledger balance of the AP account is caused by entries affecting the AP module that were never posted to the GL accounts, or entries were made directly to the AP account in GL that didn't originate through the AP module. We have also noticed that AP pre-payments sometimes cause out-of-balance situations. Look closely at the vendors affected by pre-payments to see if those transactions could be the cause of the out-of-balance situations. Remember to include the AP pre-payment account in your reconciliation. Additional assistance can be provided by contacting technical support if none of the above suggestions find the cause of the issue. Prior to calling technical support, you should know in which period the out-of-balance situation first occurred and have completed all the above steps to locate the problem transaction(s).

For information about technical support for Microsoft Dynamics SL, see Microsoft Dynamics 365 support.