Balancing Accounts Receivable Daily and Monthly

A/R should be balanced each day after posting sales and cash.

At the end of every month, balance A/R and run end-of-month reports.

We suggest a spreadsheet is created and updated daily….the spreadsheet will help with month-end balancing and daily balancing

Balancing (the same procedures are used for month & daily)

After posting sales and cash for the first day of the new month follow these procedures.

• Use the previous end-of-month A/R total and add in the Total Invoice Amount from the sales posting journal.
• Subtract the Total Change To A/R from the cash posting register.
• In Task #32: System Management Functions, Sub-task #1:Display Total Value of A/R Open, enter:
  • Starting date: Always use date 01/01/00.
  • Ending date: Use the date sales and cash were posted for.
  • Include Retail Accounts? (Y/N): Defaults to N. Always answer Y for YES.
  • Date Basis:(1)Due/(2)Document: Use #2 Document.
  • Please enter - Starting division/Ending division: Enter for ALL or if balancing divisions individually, use division number.

The A/R totals will then be calculated. The screen will show: sales value, payment value, credits value, finance charges, debits value, service value, refunds value, deposits value, and Total value. NOTE: The only one to be concerned with at this time is the Total Value

The Total Value should equal the calculated totals. Previous end-of-month A/R Balance + Total Invoice Amount from sales posting journal - Total Change to A/R on the Cash Posting Register = Total Value from Display Total A/R Open.  

Suggested spreadsheet column set-up (see document titled: AR Daily Balancing Spreadsheet Example):

Column A:                    Date of sales, cash or finance charge posting

Column B:                    Beginning Balance

Column C:                    Sales, Finance Charge and Adjustment (i.e. debit or credit memos entered through Sales Entry &

Editing) Batch #

Column D:                    Sales / Adjustments / Finance Charge postings (use “Total Invoice Amount” figure), also at month-end the total of the column should equal the "TOTAL NET SALES (From Sales History)" figure on the A/R to G/L Interface

Column E:                    Cash Posting Batch #

Column F:                    “Total Change to A/R” from cash posting, also at month-end the total of the column should equal the  "TOTAL CASH + DISC ALLOWED" figure on the A/R to G/L Interface

Column G:                    Equals “Total Value” from Display Total Value of AR      Formula:  1^st row would be: =B3+D3-F3, 2^nd row would be: =G3+D4-F4, 3^rd row would be: =G4+D5-F5, etc.

Column H:                    The “Total Value” from the Display Total Value of A/R Open (found in 2/32/1) and also “Cutoff  Grand Total” on A/R Aged Trial Balance

Column I:                     (Optional) The “Total Amount Received” from the cash posting….total of A/R monies received and all other money (i.e. Insurance refund)

Column J:                     (Optional) Total of bank deposit slip….checks and cash received

Column K:                    (Optional) Total of credit cards   Note: Column J and K should equal Column I.

Do NOT keep going if you do not balance!  Find out why you are out of balance. 

Check the postings to see if there are any zero documents #'s. There should NEVER be any zero document #'s. If the zero document is for a zero amount, it may be deleted from the A/R Open File (Task 18), but be VERY careful.

The dates on the postings should be only for the one day that was posted.

Check for invalid GL account messages. Find the item on the invoice that is the cause of the problem and fix the GL # in Inventory Control (Module 5), Item Master (Task 17).