Balancing Receivables

Use the following guidelines for comparing the General Ledger receivables balance to the balance of outstanding receivables on the client side.

1. If the month is still open, do the following; if the month has been posted, proceed to step 2. If the Journal Entry Approval Process is enabled, all journal entries must have an Approved or System Approved status before you can close an accounting month.
   1. From Home Base, click Procedures.
   2. Click Accounting, Month-End.
   3. On the options bar or menubar, click Actions > Lock/Unlock Month.
   4. On the options bar or menubar, click Actions > Generate Journal Entries.
   5. Select the agency and month for which you are generating journal entries. Print the results.
   6. If other months prior to the age date are open, regenerate mid-month journal entries and lock all prior months.
2. Run and print a Balancing Current Receivables report, using the following parameters:
   • For Agency, Branch, Department, and Profit Center, your selections should be determined by whether you are balancing receivables for one or all agencies.
   • You may select any Aging Category, but the first column must being with 0, and you must select the Over checkbox in the last column.
   • For Age Date, select the system date if you are running the report for the current month, or if you are running the report for a prior month, select the last day of that month.
   • The system defaults a major sort of Client, but if you are running the report for all agencies, you may wish to sort by Agency.
3. Run and print a Status of Accounts report, using the following parameters:
   • Match the Agency, Branch, Department, and Profit Center criteria to what you selected for the Balancing Current Receivables report.
   • The Accounting Month should be the month you are reconciling.
   • For GL Effective Date, select All.
   • For Account, select Accounts Receivable.
4. Compare the Grand Total figure from the Balancing Current Receivables report to the Ending Balance on the Status of Accounts report. If the two match, you are in balance. If you are out of balance, proceed to the next step.
5. You need to determine when Accounts Receivable became out of balance. To determine whether you were in balance last month, run the above reports for last month. If last month was out of balance, but you are only concerned with balancing the current month, determine whether this month is off balance by the same amount. If it is, this month balances. If not, calculate the difference between this month and last month’s out-of-balance amount. The difference between the two months is what should concern you.
6. Examine the individual items on each report to determine if a single item is responsible for you being out of balance. (For example, an item may have been erroneously posted to the General Ledger rather than to a client account.)
7. Verify that the month-end journal entry figure(s) on the Status of Accounts Report matches what you printed out in step #1.
8. If you are balancing for multiple agencies, repeat the process for each individual agency to help narrow down where the problem lies.
9. Run the General Ledger Register Report with the GL Entry Type set to Receipts and the Offsetting Account set to Accounts Receivable. Compare the receipts applied to clients on this report with the Production Report run only for PYMT transactions.
10. Run the General Ledger Register Report with the GL Entry Type set to Disbursements and the Offsetting Accounts set to Accounts Receivable. Compare the returns/advances posted to clients on this report with the Production Report run only for RETP and ADVC transactions.
11. If you still have not identified the discrepancy, start checking the detail posted from Month-End against the transactions recorded on the client side. Review a printed copy of the month-end journal entry, noting each time the Description changes. For each change in the description, you must run a Transaction report to confirm that section of the entry. You should only be concerned with rows that posted to Accounts Receivable. If you still have not found the issue, balance figures for a single agency at a time.
    For details regarding how to confirm each figure posted by Month-End, see Supporting the Month-End Journal Entry.

You may want to create a series of reports for balancing receivables, using the report names to group them together. Predefine the reports with the necessary parameters and use them to support each month-end posting. Remember that reports can be defined to have their Accounting Month criteria as Current Default Month plus or minus any value. If you post your month first and then reconcile, you will want to install your reports as Current Default Month -1. If you balance prior to closing the month, install the reports as Current Default Month +0.

If you are running the Production Report multiple times for different transaction types, be aware that you can set up the report for multiple transaction types and major sort by Type. This will provide a total for each of the transaction types included, and you can view all the results on a single report.