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Knowledgebase: General Ledger
Why is my G/L out of balance?
Modified on 26 November 2012 03:22 PM

A full understanding of processes to close periods and maintain the General Ledger in a healthy state is a pre-requisite to managing reconciliation processes. Full reconciliation and balancing must be completed each month as carrying discrepancies forward will typically compound problems down the track.

 

Typically an imbalance question breaks down to

1)     Why are my debtors out of balance with my G/L Debtors control account?

2)     Why does my bank reconciliation not match my Bank Account?

3)     Why are my creditors out of balance with my G/L Creditors control account?

4)     Why do my debits not equal my credits in a specific G/L trial balance report?

 

1. Why are my debtors out of balance with my G/L Debtors control account?

The most common reason is forgetting to include unallocated cash - you need to add together debtors control plus unallocated cash to get to the Debtors aged trial balance.

The next most common reason is as a result of manual G/L journals having been posted to control accounts.

Common magic wand fixes include rebuilding Debtors control and Unallocated cash accounts, and rebuilding Debtors.

When the initial running of the AR Trial Balance shows a difference between the Report and the Debtors Control Account (including the Unallocated Cash Balance), it is always wise to re-run the A.R. Trial Balance report with the ‘Skip Nil Balances’ radio button set to ‘No’. It is possible that some transactions that have been invoiced/paid within the period may be influencing the report totals

 

2. Why does my bank reconciliation not match my Bank Account?

Assuming you are looking at the GL YTD balance on the account, the most common reason for an out of balance is timing difference ie: items have been reconciled in Feb which post to March or further into the future.

Another process that can help where some transactional problem has occurred is running a full GL rebuild – leave all fields blank including the period. This may take some time.

 

3. Why is my Creditors Trial Balance out of balance with my G/L Creditors Control Account?

Again, a common reason is that manual G.L. Journals have been posted to the Creditors Control Account, or, within the creditors invoicing process, a user has changed the expense posting account to be the Control Account. 

When the initial running of the AP Trial Balance shows a difference between the Report and the Creditors Control Account, it is always wise to re-run the A.P. Trial Balance report with the ‘Skip Nil Balances’ radio button set to ‘No’. It is possible that some transactions that have been invoiced/paid within the period may be influencing the report totals

 

4. Why do my debits not equal my credits in a specific G/L trial balance report?

The most common reason is related to cross-branch or department journal transactions. If you report only one branch or branch/department, such transactions can make the report imbalanced.

If the trial balance (or sum of Nett Assets + Gross Profit in the P&L/Balance Sheet) does not equal 0.00 when run for all accounts for all periods, then the first course of action is to rebuild the G.L. for all periods (Accounting/General Ledger/Rebuild Periods). If that does not resolve the issue, then check the Suspense Report (Financial Reports/G.L./Suspense) and see if there are any transactions on the report which have an account in the ‘Suspense’ column which does not relate to the System Suspense Account or a recognisable Branch/Dept/Account.


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