How to Reconcile Your Accounts Receivable Account

How to Reconcile Your Accounts Receivable Account

In this blog you will learn “How to Reconcile your Accounts Receivable Accounts” in Microsoft Dynamics AX 2012 R3 and 2012 RTM. The Solution also applies to Version(s): 2012 Avantiico’s Senior AX Consultant & Support Service Manager Cindy Scott will guide you through how you reconcile your accounts receivable accounts nice and easy.

The Accounts receivable ledger account should ideally always tie out to the Customer aging report. Sometimes there are discrepancies. This article will explain the steps involved in finding those discrepancies by using reports available in AX.

Note: This post was updated in December 27, 2016 to include a step-by-step video as shown below.

Step 1 – Account Receivable Ledger Accounts

Compare the Accounts receivable ledger account(s) to the Customer aging report to reconcile the account or identify a discrepancy that needs to be reconciled.

In this example we will reconcile AR ledger account 130100 as of 4/30/15.

First find the ledger account balance through the Trial balance or Period balance form.

Figure 1 - General ledger > Common > Main accounts > Period button

Figure 1 – General ledger > Common > Main accounts > Period button

Second, check all Accounts receivable posting profiles to find out which customers/customer groups to run the Customer aging report for that should reconcile to the GL account being reconciled, 130100 in this case.

In the below screenshot we see that Customer group 90 posts to a different ledger account so we will exclude that Customer group when running our AR reports.

Figure 2 - Accounts receivable > Setup > Customer posting profiles

Figure 2 – Accounts receivable > Setup > Customer posting profiles

Then run the Customer aging report and compare to the ledger account balance.

Figure 3 - Accounts receivable > Reports > Status > Customer aging

Figure 3 – Accounts receivable > Reports > Status > Customer aging

In this example below, there is a discrepancy of $10,100.00 as of 4/30/15:

Ledger account 130100:$8,471,198.03
Customer aging report:$8,461,098.03
Discrepancy:$10,100.00

Step 2 – Account Reconciliation Report

Run the Customer reconciliation report to identify any transactions that posted to the ledger but not the subledger (customer) or the subledger (customer) but not the ledger.

Figure 4 - General ledger > Reports > Reconciliation > Customer > Customer

Figure 4 – General ledger > Reports > Reconciliation > Customer > Customer

Figure 5 - Results of Customer reconciliation report reflecting a difference of -$10,100.00

Figure 5 – Results of Customer reconciliation report reflecting a difference of -$10,100.00

This report shows that on 2/28/15 there were 2 transactions that posted a Ledger balance, but not a Customer balance. These account for the full $10,100.00 discrepancy.

Drill into the vouchers to view the transactions that caused the discrepancy. The below screenshot shows the 2 transactions were created in a General journal and posted directly to the ledger account without posting to the subledger (customer) account.

Figure 6 - Journal entry with the entries causing the $10,100.00 discrepancy

Figure 6 – Journal entry with the entries causing the $10,100.00 discrepancy

To prevent this type of discrepancy, always make sure the ‘Do not allow manual entry’ checkbox is marked on the ledger account to avoid direct posting to the account. This setting requires that all transactions post through the subledger accounts.

Figure 7 - Mark the 'Do not allow manual entry' checkbox on the ledger account to prevent posting directly to the AR ledger account.

Figure 7 – Mark the ‘Do not allow manual entry’ checkbox on the ledger account to prevent posting directly to the AR ledger account.

Occasionally the discrepancies are not as clear in the Customer reconciliation report and the problem is not due to direct postings to the GL account. When there might be a discrepancy within the subledger (customer) balances, compare the Customer aging report balance to Customer balance list with credit limit report balance to identify any discrepancies within a customer account.

The Customer balance list with credit limit report shows the customer summary balances that posted to the ledger. Sometimes the Customer aging report can be off from the ledger due to settlement dates, prepayments or other issues. If there is a discrepancy between these 2 reports, then compare the individual customer balances on the reports to identify the problem customer account(s).

In our example, the Customer balance list with credit limit report ties out to the Customer Aging report.

Figure 8 - Accounts receivable > Reports > Status > Customer balance list with credit limit. Ties to Aging report balance.

Figure 8 – Accounts receivable > Reports > Status > Customer balance list with credit limit. Ties to Aging report balance.

Once the reconciliation issues are addressed make sure the proper steps (fix setups, training, etc) are taken to avoid the same problems in the future.

Now that you know how to Reconcile Accounts Receivable, the Accounts payable reconciliation can be accomplished in a similar way using similar reports in the Accounts payable module.

Accounts Receivable Account training

For more information about Accounts Receivable Account and how you can Reconcile Accounts Receivable in Microsoft Dynamics AX2009, AX2012 R2, R3 contact our Dynamics experts for training proposal, demos etc. on info@avantiico.com.

If your organization are considering a move to Microsoft Dynamics 365 for Finance & Operation you can watch this upgrade tutorial where Michael Oakes take you through the different upgrading paths –

How to upgrade from Microsoft Dynamics AX to Dynamics 365 Finance & Operation? or contact our experts on info@avantiico.com

About Cindy Scott

Cindy Scott has created 12 entries.

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