PCSchool Reconciling your Debtors. Table of Contents

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1 Reconciling Debtors Table of Contents Are you Accrual or Cash?... 2 Setting up the Reconciliation Report Alias... 2 Printing the Debtors Reconciliation Report... 3 Example of Debtors Reconciliation Report:... 4 What causes a Debtors Reconciliation Variance... 5 How to reconcile a variance between Debtors and General Ledger... 6 Step 1: Finalise Batches... 7 Step 2: Finalise all Debtor Accrual batches in the General Ledger... 8 Step 3: Check Debtor Account Validity... 8 Step 4: Check Debtor Cost Centres... 9 Step 5: Check the General Ledger Trial Balance If the Ledger report shows Yes If the Ledger report shows No To find error Step 6: Check General Ledger Transaction Listing for Debtor Control account 13 Step 7: Compare Debtor Invoices to Debtors Accrual Batches in GL How to print the Debtors Invoice report: How to print the Transaction Listing Step 8: Compare Debtor Receipts to Debtors On-Line Receipt Batches in GL.. 20 How to print Debtors Receipt Report: How to print the Transacting Listing: When both Debtors and Ledger use 12 Periods (Jan to Dec) When Debtors Periods Differ to Ledger Periods (Dr=by Term / GL=by Month) Finding the Individual Receipt Batch/es with the Error Conclusion Version 2017 Page 1 of 30

2 Are you Accrual or Cash? Path: Utilities System File Maintenance Financial System Default tab Schools running an Accrual Accounting System should perform a debtors reconciliation weekly or, at minimum, on a monthly basis. Your System File will show you what Accounting System you use (Accrual or Cash) and what your General Ledger Control Account is. If a variance occurs between Debtors and General Ledger you will need to investigate where this discrepancy is and correct it. This tech tip will take you through the various steps to find where the discrepancy between the Debtors and the Ledger has occurred and what to do to fix the problem. Setting up the Reconciliation Report Alias Path: Debtors Module Utilities Report Alias Settings A Debtors Reconciliation report is available in PCSchool and compares the Debtors family outstanding balances to the General Ledger debtors control account and shows any variance between the two. This report should already exist in your Report Alias Settings as shown below. Version 2017 Page 2 of 30

3 Printing the Debtors Reconciliation Report Path: Debtors Module Debtors Debtor Transaction Listings The report is printed through the Debtors Module under Debtor Transaction Listings reports: This report is run on your live data as it is today. 1. Leave Period for Report as the current Debtor Period Leave Period Selection Criteria as Up To and Including Period. 2. From Family and To Last Family should be blank to include all debtors. 3. Select the Debtors Reconciliation Report from the Report Style list. 4. Select to print the report to Window or Printer. Select Print to run the report. 5. NOTE: This report may take several minutes to print as it runs through both Debtor and General Ledger transactions to calculate a variance. Version 2017 Page 3 of 30

4 Example of Debtors Reconciliation Report: Total of Debtors Balances per Family Accounts is the outstanding family balances from the Debtors module. GL Debtor Control Account Total is the debtor control account details and balance from the General Ledger. Debtor Open Invoices Not Accrued are new fees and charges invoiced against Debtor families that have not yet been brought across to the General Ledger via a Debtor Accrual Batch. This amount needs to be added to your GL debtor control balance above. Ledger Batches Not Finalised or Pending are any Debtor On-Line Receipt Batches or Debtor Accrual Batches that have not been finalised or are pending to the General Ledger. This amount needs to be added to your GL debtor control balance above. General Ledger Adjusted Total is the result of + + above. This value should balance with the value in above. Variance between Debtors and General Ledger should show $0.00. However it will show the difference between and above if the debtors does not reconcile. Version 2017 Page 4 of 30

5 What causes a Debtors Reconciliation Variance To understand how a discrepancy can occur you need to understand the relationship between the Debtors and General Ledger in an Accrual Accounting System. This can best be explained using the following diagram: The above diagram shows that when you invoice fees and charges in Debtors this will increase your outstanding family balances. These invoices are then brought across to the General Ledger via a Debtor Accrual Batch when you perform a Debtors End of Period. So now your Debtors show that your family balances have increased by $X and your General Ledger shows that your debtors control account has increased by $X also. When families pay their accounts in Debtors this will reduce your outstanding family balances. These receipts are then brought across to the General Ledger via a Debtor On-Line Receipt Batch when you finalise the Debtors Receipt Entry Batch. So now your Debtors show that your family balances have decreased by $X and your General Ledger shows that your debtors control account has decreased by $X also. Version 2017 Page 5 of 30

6 Common reasons for a difference between the Debtors and the General Ledger may be that a change has been made to the Debtors family balances that have not been reflected in the General Ledger debtor control account (or vice versa). These could include things like: Debtor cost centre with no or an invalid GL account, therefore showing as unapplied to the GL. Debtor family account validity errors. Account validity errors corrected the wrong way in Debtors. A journal / payment / cancelled cheque being processed to the GL debtor control account. How to reconcile a variance between Debtors and General Ledger In the Debtors Reconciliation below we can see there is a variance DEBTORS balance and the GENERAL LEDGER Adjusted Total. of $ between the PCSchool recommends you take the following steps to find where the variance has occurred: 1. Finalise all Receipting and Billing Batches in Debtors 2. Finalise all Debtor Accrual Batches in General Ledger 3. Check Debtor Account Validity 4. Check Debtor Cost Centres 5. Check General Ledger Trial Balance 6. Check General Ledger Transaction Listing for GL debtor control account 7. Compare Invoices in Debtors to Debtors Accrual Batches in GL debtor control account 8. Compare Receipts in Debtors to Receipts in GL debtor control account Version 2017 Page 6 of 30

7 Step 1: Finalise Batches Path: Debtors Batch Billing View Finalising any debtor related batches will make the task of finding the discrepancy easier. If you find a batch with an unapplied amount this may be the cause of the variance. Finalise any Billing batches. Path: Debtors Receipt Entry Finalise any Receipt batches. Version 2017 Page 7 of 30

8 Step 2: Finalise all Debtor Accrual batches in the General Ledger Path: Debtors > General Ledger >Batch Transaction Entry Step 3: Check Debtor Account Validity Path: Debtors Account Validity The Account Validity Report looks at your individual families and compares the figures in the Account Master File General tab to the actual transactions (invoices & receipts) for the family. 1. Leave the From and To fields blank to include all families in the report. 2. Selection Criteria should be Print Errors Only. 3. Pint to should be Preview. 4. Select Print to run the report and view any validity issues. Once the system has checked the validity of your debtor accounts it will print an Account Validity Listing report to screen. This report should be empty and show no families. If there is a validity error phone the PCSchool Help Desk for assistance in correcting them. Version 2017 Page 8 of 30

9 See our help document on how to fix Account Validity Errors if unsure please call PCSchool helpline Once validity errors have been corrected reprint the Debtors Reconciliation. If there is still a variance between the Debtors and General Ledger then move on to the next step. Step 4: Check Debtor Cost Centres Path: Debtors Cost Centre Printout It is important to check that your cost centres are attached to valid general ledger codes. If cost centres are not attached to valid codes they will show as unapplied in your Debtor Accrual Batches, or, if a cost centre has the same ledger code as the Debtor Control account this could cause an imbalance. 1. Select From Item 0 (zero) and tick To Last Item. 2. Select the Cost Centre Report. 3. Select to Print the report. Example of Cost Centre Report: Version 2017 Page 9 of 30

10 From the printed Cost Centre Report check that: The GL Account and Sub Account are valid and exist in your General Ledger Chart of Accounts. This will cause an unapplied amount in the Debtor Accrual Batch. No cost centres have the Debtor Control Account (eg ) attached to them. This will result in a debit/credit to the 6200 account in a Debtor Accrual Batch, where there should be a debit to 6200 and a credit to an income account. Step 5: Check the General Ledger Trial Balance Path: Finance Module Gen Ledger Trial Balance The Ledger Trial Balance Report shows the balances for all your ledger accounts. All transactions in the ledger are made up of a debit and a credit (or plus and minis), if this debit/credit has not occurred correctly it will usually show in the Trial Balance as an imbalance. The reason this Trial Balance imbalance may affect the Debtors Reconciliation is when the cause of the imbalance is in a Ledger Batch On-Line Receipt Batch or Debtors Accrual Batch. The most common issue is when a receipt is deleted from a receipt batch in Debtors, but due to a network glitch it is not deleted out of the receipt batch in Ledger. 1. Select the Entity. Select the Ledger Period to use. We recommend that you print up to December of the 2. current Year, as this will show you if any periods in the current year are out of balance in the Ledger. 3. Select the Report Style of Ledger Trial Balance. 4. Leave the Consolidation option as Account No. 5. Select to Print to Window and then Print the report. Version 2017 Page 10 of 30

11 If the Ledger report shows Yes at the top for both the Period and for the Year to Date. If your Ledger Trail Balance Report is in balance move on to the next step. If the Ledger report shows No at the top of the Year to Date column you will need to print the report for each previous month to find the period where No appears for both Period and Year to Date. Example shows Trial Balance out for September 2010: Version 2017 Page 11 of 30

12 To find error Path: Finance Module Gen Ledger Batch Reports Once you have identified the month (or possibly months) where the ledger is out of balance you can print a summary of your Ledger Batch On-Line Receipt batches to see if it is one of these batches that is causing the imbalance. 1. Select the Entity. 2. Select the Batch Type of On Line Receipts. 3. Select All Batches for (month where TB is out). 4. Select the Report Style of Ledger Batch Report Transaction Order. 5. Select the Detail of Summary. 6. Select to Print the report. On the last page of the report that prints you will see a Ledger Batch Range Dissection Summary. This shows all the Ledger Posting Accounts affected by the batches in the report. For Ledger Batch On-Line Receipt Batches the Debit Total amount and Credit Total amount at the bottom of this summary should be the same. Version 2017 Page 12 of 30

13 If the Debit Total and Credit Total do not balance in the Batch Range Dissection Summary you will need return to page one of the report, and looking at the dissection summary for each batch, find the individual batch or batches causing the imbalance. When you have identified the batches that do not balance we recommend you call the PCSchool Help Desk for assistance in correcting them. Once the Ledger Trail Balance Report is in balance reprint your Debtors Reconciliation Report. If there is still a variance between the Debtors and General Ledger then move on to the next step. Step 6: Check General Ledger Transaction Listing for Debtor Control account Path: Finance Module Gen Ledger Transaction Listing The only transactions that should appear in the GL Debtor Control account are those from Debtor Accrual Batches and GL On-Line Receipt Batches. There should be no other type of transaction debited or credited to the debtor control account (this includes journals, ledger or creditor payments, cancelled cheques etc). Version 2017 Page 13 of 30

14 To check that no transactions of these types have been posted to the Debtor Control account you can print a transaction listing by Type. 1. Select December (current year) in case a batch has been finalised to the end of the year. 2. Period Selection Criteria should be Up To and Including Period. 3. Select the Debtor Control Account (eg. 6200). Leave the Sub Account as Select Report Style of Ledger Transaction Listing by Type. 5. Output destination should be Print to Window. 6. Select to Print the report. Enter the Parameter Values: 1. Select each type of batch from the list EXCEPT D-Debtor Accruals or R-Debtor Receipts. 2. Select Add to add each type. 3. The selected types of batches will be listed below. 4. To remove a type (eg. Debtor Receipts) highlight the line in the list and select Delete. 5. Once all types of batches are listed (except D and R) select OK to print the report. Version 2017 Page 14 of 30

15 Example of Transaction Listing by Type: From the printouts above we can see that several journals and a ledger payment have been posted to the Debtor Control account. The Journals entered in December 2009 cancel those entered in January 2010 so they have a nil effect on the account. The ledger payment however, should not have been posted to this account. Instead it should have been posted to an income or liability account. The ledger payment batch should be unfinalised and corrected, or a journal to credit 6200 and debit the correct account will need to be done. Once any corrections have been made, reprint your Debtors Reconciliation Report. If there is still a variance between the Debtors and General Ledger then move on to the next step. Note: If still out especially at the beginning of the year print the report from the previous December XX to current as it is usually a journal that has been posted to take up your fees paid in advance from your auditor which needs to be reversed again in January Version 2017 Page 15 of 30

16 Step 7: Compare Debtor Invoices to Debtors Accrual Batches in GL Path: Debtors Module Debtors Invoice Reports In an accrual system invoices billed in the Debtors Module (Family Invoices) are brought into the General Ledger (debtor control account) via a Debtors Accrual batch. Therefore the invoices in Debtors should equal the debtors accrual batches in the Ledger. We can check this by printing a Debtor Invoice Report and a GL Transaction Listing (by type) and comparing the two reports for discrepancies. How to print the Debtors Invoice report: 1. Select December (current year) as the Period for Report. 2. Make the Period Selection Criteria Up To and Including Period. 3. Leave From Family and To Family blank so all families are included in the report. 4. Leave From and To Cost Centre blank (or tick To Last Cost Centre) to include all in report. 5. Select the Report Style of Invoice by Period by Item-Summary. 6. Make the Print Options Print All Items. 7. Print the report. Print the report and take note of the Grand Total Charged on the last page of this report: Version 2017 Page 16 of 30

17 How to print the Transaction Listing Path: Finance Module Gen Ledger Transaction Listing 1. Select December (current year) 2. Period Selection Criteria should be Up To and Including Period. 3. Select the Debtor Control Account (eg. 6200). Leave the Sub Account as Select Report Style of Ledger Transaction Listing by Type. 5. Select to Print the report. 6. Add the batch type of D-Debtor Accruals only so it appears in the list below. 7. Select OK to print the report. Print the report and take note of the total of the batches on the last page of this report: Version 2017 Page 17 of 30

18 Compare the totals of these two reports and make a note of any discrepancy as below: To find where the discrepancy exists, first reprint your Debtors Reconciliation to see if you have any Open Debtors Invoices Not Accrued. Version 2017 Page 18 of 30

19 From the above we can see that the difference of $ between the Debtor Invoices and GL Debtor Accrual Batches are Debtor Invoices not yet brought across to the GL. However if the discrepancy does not exactly equal the unaccrued debtor invoices you will need to do a period by period comparison between the Debtor Invoices and GL Accrual Batches. If you only create an accrual batch as part of the Debtor End of Period routine each month or term each Debtor Period should have a corresponding Debtor Accrual batch with the same total as shown below: If however you use the utility function in Debtors End of Period and create an accrual batch without rolling the Debtors you may have several accrual batches in the Ledger for each Debtor Period. Contact the PCSchool Help Desk if you are having difficulty matching up your Debtor Invoice Periods with your Ledger Accrual Batches. Any discrepancies found in this process will need to be investigated and corrected (most likely with the assistance of the PCSchool Help Desk). Once any corrections have been made, reprint your Debtors Reconciliation Report. If there is still a variance between the Debtors and General Ledger then move on to the next step. Version 2017 Page 19 of 30

20 Step 8: Compare Debtor Receipts to Debtors On-Line Receipt Batches in GL Path: Debtors Module Debtors Receipt Reports Similarly in an accrual system payments received in the Debtors Module (for family invoices) are brought into the General Ledger (debtor control account) via an On-Line Receipt batch. Therefore the debtor receipts in Debtors should equal the receipt batches in the Ledger. We can check this by printing a Debtor Receipt Report and a GL Transaction Listing (by type) and comparing the two reports for discrepancies. How to print Debtors Receipt Report: 1. Select December (current year) as the Period for Report. 2. Make the Period Selection Criteria Up To and Including Period. 3. Leave From Family and To Family blank so all families are included in the report. 4. Make the Report detail Show Summary. 5. Select the Report Style of Receipt Summary. 6. Select the Type to Print Invoicing. 7. Print the report. Print the report and take note of the Grand Total for the Debtor column on the last page of this report: Version 2017 Page 20 of 30

21 How to print the Transacting Listing: Path: Finance Module Gen Ledger Transaction Listing 1. Select December (current year) 2. Period Selection Criteria should be Up To and Including Period. 3. Select the Debtor Control Account (eg. 6200). Leave the Sub Account as Select Report Style of Ledger Transaction Listing by Type. 5. Select to Print the report. 6. Add the batch type of R-Debtor Receipts only so it appears in the list below. 7. Select OK to print the report. Print the report and take note of the total of the batches on the last page of this report: Version 2017 Page 21 of 30

22 When both Debtors and Ledger use 12 Periods (Jan to Dec) Compare the totals of these two reports and make a note of any discrepancy as below: To find where the discrepancy exists, first reprint your Debtors Reconciliation to see if you have any Ledger Batches Not Finalised or Pending. We can see from the printout that there are no unfinalised or pended Ledger batches. This means that all Receipt batches have been posted to the Debtor Control Account. Version 2017 Page 22 of 30

23 You must now investigate further to find where the discrepancy between the Debtor Receipts and the Ledger On-Line Receipts has occurred. To do this you will need to do a period by period comparison between the Debtor Receipts and GL On-Line Receipt Batches. Looking at the Debtor Receipt Summary you printed take note of the Period Total for Period1: Next print a Ledger Transaction Listing for Type R-Debtor Receipts as per page 21 above, but select January (current year) as the period and select Single Period Only: Looking at the last page of this Transaction Listing take note of the total transactions for January: We can see that the Period Total for both reports above is the same. If there is a difference this may be because a batch in Debtor Period 1 was finalised to either Prior Year or to a future period (eg February) in the Ledger. Repeat this process for each period to find the period with the $ difference. Once you have found the period where the totals do not balance you will need to look for the individual batch or batches causing the difference. Refer to page 26 on how to do this. Version 2017 Page 23 of 30

24 When Debtors Periods Differ to Ledger Periods (Dr=by Term / GL=by Month) Path: Debtors or Finance Module System Period ID If your Debtor Periods are by Term (eg. Pd1=Term 1, Pd2= Term 2) and your Ledger Periods are by month (eg. Pd1=Jan, Pd2=Feb) then comparing the receipts in each period will be more complicated than shown above. See the following pages on how to deal with this. Path: Debtors Module Debtors Receipt Entry As this means that Period 1 in Debtors covers a different date range (eg. January to March) than Period 1 in the Ledger (eg. just January) you will need to find out what Receipt Batches were finalised in Debtors Period 1 by looking at the Receipt Entry screen. In the image above we can see that batches 25 to 30 were finalised to Period 3 in Debtors. Looking at the Ledger On-line Receipt Batches below we can see that these same batches have been finalised mostly to Ledger Period 11 but also to Period 1 and Period 7. Version 2017 Page 24 of 30

25 Path: Debtors Module General Ledger Batch Transaction Entry We know that Debtor Period 3 is made up of Receipt Batches 25 to 30. Now in comparing the Debtors to the Ledger we need to do the following. Look at the Debtor Receipt Summary report you printed take note of the Period Total for Period 3: Path: Debtors Module General Ledger Batch Reports Next we look at the On-line Receipts Batches in the Ledger for this Debtor Period (Batches 25 to 30). Version 2017 Page 25 of 30

26 Looking at the last page of this report take note of the amount being posted to the account: We can see that the Debtor Period Total and Ledger Batch Range total above is the same. Repeat this process for each Debtor Period / Batch Range to find the $ difference. Once you have found the period / batch range where the Dr / GL totals do not balance you will need to look for the individual batch or batches causing the difference. Finding the Individual Receipt Batch/es with the Error After checking each period or each period/batch range one by one I have found that there is a $ difference in September (Period 9). With Debtors showing we receipted $191, in September and the Ledger showing we receipted $190, for the same month / batch range. Debtors Receipts for Period 9: Ledger Receipts for Period 9 Where Dr & GL both use Jan-Dec Periods: Version 2017 Page 26 of 30

27 OR Ledger Receipts for Batch Range Where Dr& GL do not both use Jan-Dec Periods: From the comparison above we can conclude that we have found the cause of the Debtors Reconciliation variance between Debtors and GL. Path: Debtors Module Debtors Debtor Batch Printout The next step is to look at each Receipt Batch in that period / batch range to find the individual batch or batches causing the discrepancy. 1. Select Report Detail of Summary. 2. Make the Batch Type Receipt. 3. Change the option from Single Batch to All Batches for (period in question eg. September). 4. Print the report. Version 2017 Page 27 of 30

28 Path: Finance Module Gen Ledger Batch Report 1. Make the Batch Type Receipt. 2. Change the option from Single Batch to All Batches for (period in question eg. September) or Batches by Number Range and enter in the first and last batch. 3. Select report Detail of Summary. 4. Print the report. Debtor Batch Printout: Take note of the Total in the Batch Summary box at the end of the batch. Version 2017 Page 28 of 30

29 Ledger Batch Report: Take note of the amount posted to the Debtor Clearing account (eg. 6200) in the Dissection Summary box at the end of the batch. Look for any batches where these two figures are not the same or where there may be an unapplied amount in the batch. In comparing each receipt batch in Debtors to the General Ledger I have found that batch 8857 has an unapplied amount in the Ledger On-Line Receipt batch, shown below: Version 2017 Page 29 of 30

30 Once you have found the batches with the errors you may need to phone the PCSchool Help Desk for assistance in resolving the issue. Conclusion By following the instructions in this tech tip and performing the steps as outlined you should find where the variance between the Debtors and General Ledger has occurred. Sometimes you may find and fix the issue at step 1, other times you may have to follow all 8 steps to find the problem. Version 2017 Page 30 of 30